The New York Police Department (NYPD) has reinstated a Muslim policeman who was suspended last month for refusing to shave his beard.

Police officer Masood Syed, a law clerk at NYPD, filed a lawsuit on June 22 to challenge the constitutionality of NYPD's policy that bans beards among its employees after he was suspended without pay and his badge and gun confiscated for refusing to follow the rule.

NYPD has an unwritten policy that allows beards up to 1 millimetre long only for religious accommodation, according to Reuters. Syed has worn a beard from 1/2 to 1 inch for two years for religious reason.

The NYPD was ordered last week to continue paying Syed's salary and benefits pending the outcome of the case.

"It seems like the department has taken the crucial first step in addressing an important and growing concern of officers of many different faiths," said Syed. "I am hopeful that the department's new policy will in fact allow myself and other officers to wear our beards at a reasonable length without the fear of retaliation or hostility."

In a letter to U.S. District Court Judge Paul Gardephe, the New York City Law Department said the NYPD advised Syed on June 29 that he was to report to the department on June 30 "in order to be restored to full duty."

Syed was given a letter confirming his reinstatement and that the NYPD said it will conduct an internal review of its ban on beards.

"The NYPD will also review its policies and practices regarding the case-by-case assessment it performs of requests for reasonable accommodations submitted to the NYPD's Office of Equal Employment Opportunity" regarding the beard policy and its disciplinary procedures, and compliance with reasonable accommodation including the 1 millimeter exception, the letter says.

It adds that during the 120-day review, Syed will not be subjected to any action about complying with the policy.

The law department has also asked the court to adjourn the hearing scheduled on July 8 regarding Syed's request for preliminary injunction against the policy. It said Syed agreed to the request.