Following backlash, Victorian Premier Jacinta Allan took to social media to confirm she would overturn a ban on the Melbourne CBD site being used to screen the Australian men's team clashes.
"There's always a risk of bad behaviour from a few di**heads at every public gathering, police and security will be on site, and there will be zero tolerance for it," she said.
"The World Cup should bring us together, not keep us apart.
"Good luck Socceroos - Victoria is behind you."
Melbourne Arts Precinct director and chief executive Katrina Sedgwick on Wednesday confirmed Federation Square would not hold public screenings due to poor behaviour by attendees in past years.
"After careful consideration, we've made the decision not to show the World Cup on Fed Square's Big Screen this year," she said.
She doubled down on that position earlier on Thursday before the premier intervened.
The move had frustrated fans, players and organisers of the sport alike, including Matildas captain Sam Kerr.
After learning of the initial decision, Football Australia expressed its disappointment with the state government and Melbourne Arts Precinct.
"Federation Square has created some of the most memorable moments in Australian sporting history," chief executive Martin Kugeler said.
Former Socceroos captain Craig Foster welcomed the reversal and thanked the premier for stepping in.
"Every major city needs fan zones and events to cheer on our national team in the most important sporting event there is," he wrote on X.
"Moments that bring us all together, build sense of community, and last a lifetime."
Federation Square has hosted thousands of fans to watch Australia's men's and women's team fixtures since the 2006 World Cup in Germany.
Video of feverish celebrations at the venue were shared widely when Australia advanced to the round of 16 during the 2022 Qatar tournament.
Several incidents marred the screening, however, including revellers setting off projectiles.
Ms Sedgwick had suggested the layout of the site meant it was difficult to control fan behaviour and pointed to the lighting of more than 100 flares at a single event.
The Socceroos will make their seventh appearance at the men's World Cup finals and have drawn Turkey, the United States and Paraguay in the group stage of the tournament to be jointly hosted by Canada, Mexico and the US from June 11 to July 19.
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