Despite earlier statements by Iranian officials that Arash Miresmaeili was told not to fight Ehud Vaks last Sunday because of Tehran's political boycott of Israel, the source said the International Judo Federation (IJF) had now accepted Miresmaeili had a genuine medical reason for showing up too heavy to fight.
Refusal to fight on political grounds would run contrary to Olympic ideals and risk sanction for the athlete and team.
The double world champion weighed in for the bout more than 5 kg over the 66 kg limit, an extraordinary margin at the top level of the sport.
An Iranian Olympic official had said at the time that the failure to fight was due to the Islamic republic's boycott of the Jewish state and that it was not Miresmaeili's decision.
Iranian
However, judo officials had since said that Iran's official explanation to the IJF had been that the fighter had suffered from digestive problems on arrival in Athens and had been unable to lose weight in time. Fighters normally count on bringing their weight down to the required limit just ahead of a contest.
After a final meeting on Thursday between IJF officials and the Iranian Judo Federation, the international governing body told Iranian judo president Mohammed Derakhshan that no further action would be taken in the matter.
Miresmaeili has made no public comment beyond his quotes on the Iranian news agency but many fellow fighters in world judo believe he was pulled out of the bout against his will.