The dog's owner, Lisa O'Brien, 23, was said to be "overjoyed" at the news that it would not be destroyed. However, Ms O'Brien may still face court action under the 1871 Dogs Act for allegedly having a dangerous dog which was not kept properly under control.
Her solicitor, Trevor Cooper, said: "If the police proceed with that we will defend it in the ordinary way. My concern was always for the welfare of the animal. The death threat over the dog has been lifted and common sense has prevailed."
The dog had been held in police kennels since chasing and killing a cat in Bexleyheath, south-east London, on Friday.
Lucy was said to have been seized under the Dangerous Dogs Act, but in a letter to the Metropolitan Police on Tuesday Mr Cooper, said he was "somewhat bemused" as to which part of the Act police believed had been breached.
He claimed the dog was being held unlawfully and if confirmation was not received by noon yesterday that the dog would be returned within 24 hours, civil proceedings would be issued against Sir Paul Condon, the Metropolitan Police Commissioner, for its return and damages.
Scotland Yard said later: "We can confirm that arrangements are being made for the English bull terrier to be returned to its owners today. Although there will be no further action by police in relation to the incident involving the cat, inquiries in relation to the dog's behaviour and history are continuing."Reuse content