Archdiocese of Newark Cardinal Joseph Tobin announced the change Wednesday.
The boys on the St. John's team in Clark had decided to give up their season rather than play a game without their female teammates. The rest of their season was then forfeited.
The archdiocese had said that Catholic Youth Organization rules state that teams should be boys or girls only. However, NJ.com found that the league rules do not mention whether the teams in St. John's division -- the JV black league -- can or cannot be coed.
Archdiocese spokesman Jim Goodness said Tobin believes the team shouldn't have been penalized for mistakes that adults responsible for following league rules might have made.
According to Goodness, Tobin asked CYO officials to "study the current league rules regarding participation and team makeup in all age groups" and reinstated the team's 7-3 record.
Rob Martel, coach and father of one of the girls, fought back tears when he told the team that its season was going to continue and they would be going to the playoffs.
"This is all we ever wanted," assistant coach Keisha Martel said. "This was never about being defiant or wanting to break, bend or change rules. It was about fairness for these 10-year-olds, about finishing the season the way they started -- together."
Tobin said he wanted the children to play for the reasons CYO sports were established. "To provide a source of both recreation and reaffirmation of our Christian faith," Tobin said.