The four-knot zone on the River Murray near Long Island will be removed after years of pressure from the community.
Speed restrictions were introduced during the 2009 drought, when water levels were low and sections of riverbank regularly collapsed into the river, taking trees and - on at least one occasion - cars with them.
In Parliament on Thursday, Transport Minister Stephen Mullighan said investigations had proven the danger had now passed.
"Due to ongoing stable water levels over the last few years ... lifting the speed restriction that is currently in place is unlikely to cause further erosion or collapse of the riverbank in this area," he said.
"This (removing the speed restriction) is just another way we can assist those using the river to enjoy it but, importantly, do so without damaging the surrounding environment."
Member for Hammond Adrian Pederick, who worked collaboratively with his political opponent to get the zone removed, welcomed the result.
Lifting the speed restriction ... is unlikely to cause further erosion or collapse of the riverbank.Stephen Mullighan
"This has been a long process and I believe many river users will be pleased with the outcome," he said.
"The Murray River is a fantastic touristic resource which is utilised by many differing river users, whether they be kayakers, rowers, jet skiers, boat users or fishermen, so it's important we maintain this wonderful resource now and into the future."
The decision came with the support of the Murray Bridge council, River Murray Boating and Recreation Advisory Group and other boating industry figures.
The Department of Planning, Transport and Infrastructure and Department of Environment, Water and Natural Resources will continue to monitor the riverbank and water levels to ensure there are no ill effects.
It is not yet clear what effect the zone's removal will have on the future of nearby waterfront areas, including shacks on Riverfront Road, which have remained off-limits since the riverbank collapses of 2009-10.