William Barclay was stopped at Dubai International Airport in September after an incident in 2016 when he presenting one counterfeit £20 note as he tried to exchange money at the Al Hamra Mall in Ras Al Khaimah.
He was accused of being in possession of counterfeit cash and questioned by detectives for 12 hours before being told no charges would be brought.
On his recent return to the country last month with his wife Monique and two children, Mr Barclay was stopped at Dubai International Airport in connection with the 2016 incident.
He was questioned by police for three days then released on bail, but his passport was confiscated meaning he had to remain in the country.
He was staying in a £120-a-night hotel awaiting the outcome of the case against him.
Now the charity Detained in Dubai, which was representing Mr Barclay, said he had been promised the passport back.
Mr Barclay was quizzed by detectives for 12 hours after his initial arrest in 2016.
He was accused of being in possession of counterfeit cash but then told no charges would be brought and was allowed to continue his family holiday.
Mr Barclay faced up to a year in jail in the UAE, a £1,000 fine and deportation back to the UK.
Radha Stirling, chief executive of Detained in Dubai, said that without international support and publicity, he could have been held for many months, if not years, which has been the case with other British Nationals.
He said: “The Ras Al Khaima tourism development authority telephoned me today to advise that they had arranged for Mr Barclay’s passport to be returned at 20:30 local time this evening.
“Ms Frei told me that they would escort him to the airport and make sure he is back in Edinburgh, reunited with his family as soon as possible.
“She also advised that they would pay for his hotel bills.
“She said that it was a police issue and that the government of Ras Al Khaima would be ‘making changes for the future’.
“I have spoken with Billy and his family who are over the moon, relieved and excited that their ordeal has almost come to an end. They can breathe again.”
The Foreign and Commonwealth Office was also providing assistance to the family.