Just hours after the Brazilian government sought an explanation from the university, its dean released a note saying he was reversing the school's decision to expel Arruda.
The Education Ministry had given the university 10 days to clarify its reasoning for kicking out Arruda, who had to put on a professor's white coat and was escorted away by police amid a hail of insults and curses from other students.
A video of the incident was posted on YouTube and quickly made headlines across Brazil. The university's decision to expel the student Sunday prompted complaints from the national student union and the country's minister in charge of women's policy, among others.
Sao Paulo state prosecutors had said they would investigate what led to the university's decision to expel Arruda, and the student later told reporters through her lawyer that she was going to sue the teaching institution in hopes she could finish the semester there.
The dean's note gave no reasons for why the decision was being overturned.
Arruda and her lawyer could not be reached immediately for comment on the school's reversal.
Although Brazil is known for revealing clothing -- especially in beach cities, where many bikinis are referred to locally as "dental floss" -- most college students dress more modestly on campus, commonly in jeans and T-shirts.
The university published newspaper advertisements Sunday saying it expelled Arruda for disrespecting "ethical principles, academic dignity and morality."
The ads also alleged Arruda acted in a provocative manner incompatible with the university environment.
University lawyer Decio Lencioni told Globo TV that the institution was only following its rules.
"The problem is not her clothes; it's her behavior, her attitude," he said.
Lencioni and the university said Arruda even raised her dress and stopped to pose for photos the night she wore the short dress on campus. He said she also chose the longest way to get to class to attract the attention of more students.
In Sunday's ads, titled "Educational Responsibility," the college said it had previously warned Arruda to change her behavior and decided to expel her after talking to students, staff and Arruda herself.
Arruda, who was studying tourism, said she was disheartened by the decision.
"It's a great injustice," she told Globo TV. "I always dressed in a way that makes me feel good and that doesn't offend anybody. I was always like that and was never recriminated by anybody."
Civil police in the city of Sao Bernardo do Campo, where the university is located, said they will investigate the students accused of heckling Arruda. The university said it would temporarily suspend some of them.
Brazil's national student union, the Brazilian BAR Association, and several other institutions condemned Arruda's expulsion. Brazil's minister for women's policy, Nilcea Freire, told the official Agencia Brasil news service Sunday that the decision showed "intolerance and discrimination."
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