Members of the Nairobi County Assembly have directed Governor Johnson Sakaja to lift the ban on night clubs, issued on November 25.
The MCAs said the order "was not clear and it is affecting all the night clubs, even those that are compliant."
MCAs adopted the report by the Sectoral Committee on Culture and Community Services acting on a petition by the Pubs, Entertainment and Restaurant Association of Kenya (PERAK), on Friday afternoon.
PERAK lodged a complaint that the order by Sakaja was discriminatory and disregarded the fact that the same county government had issued licences for the businesses to operate as nightclubs.
The Association said that while only 400 of Nairobi's 12,000 licensed bars are licensed to operate at night, the blanket order had given county enforcement officers the wherewithal to 'ruthlessly' enforce the order. The sector generates about Sh21 billion per year.
In the report adopted by the County Assembly, the MCAs directed enforcement officers from the County and the national police to immediately cease to enforce the order pending its clarification.
The reversal of the order comes days after Sakaja was asked by Deputy President Rigathi Gachagua to consult before making decisions that affect businesses in the capital city.
In the report, the MCAs also asked for a review of the revoked licenses for night clubs that are compliant.
Part of PERAK's complaint was that there are grey areas in the planning of the city that have blurred the lines between commercial and residential areas.