The Transport Department on Thursday said it asked South African National Roads Agency Limited (Sanral) CEO Nazir Alli to return because it felt he had been unfairly blamed for the e-tolling scandal.
Earlier on Thursday, Deputy President Kgalema Motlanthe revealed that Alli agreed to stay on.
This is despite the Sanral board announcing his departure, and appointing board member Koos Smit as acting CEO.
It also emerged government was considering a new bill to bail out the agency while the court battle over e-tolling continues.
Alli's decision to reconsider his resignation came as a surprise.
Transport Minister Sbu Ndebele said Alli has too much experience which cannot be lost.
“[His resignation] was his way of saying that if he is the problem then he is removing himself. We had to explain that he was not the problem.”
Finance Minister Pravin Gordhan said government is still figuring out where the bail-out money for the proposed bill will come from.
He said they have a range of options which they are looking into.
The legal battle over e-tolling now looks set to be fought at the Constitutional Court within the next few months.
In April, the North Gauteng High Court made an urgent interdict against the implementation of the controversial Gauteng tolling system.
Judge Bill Prinsloo said an urgent review had to be heard on the matter.
Alli had handed his resignation shortly after the ruling was made.