The church, which was built on the site where Christians believe Jesus was born, was named a UNESCO world heritage site in 2012 due to its poor condition.
UNESCO said in a statement that high-quality work restoring "roof, exterior facades, mosaics and doors had since been completed.
A UNESCO committee decided to remove the church from the endangered list during a meeting in Baku, the capital of Azerbaijan, which began on 30th June and continues until 10th July.
Located in the West Bank, the church was built over a cave where Mary is said to have given birth to Jesus. The site also includes several other churches.
The Palestinian Authority launched the renovation after the iconic church was placed on UNESCO's endangered list.
In its request to be removed from the endangered list, the Palestinian Authority said it had overseen the "implementation of the conservation works at the Church of the Nativity, which included a series of restoration works which mainly targeted the restoration of the roof and the narthex [altar lobby entrance] and all other components of the desired state of conservation for the removal of the property from the List of World Heritage in Danger".
During the Christmas season, pilgrims from around the world visit the church and the grotto within it.
Stay up to date with the latest news stories from a Christian perspective. Sign up to our daily newsletter and receive more stories like this straight to your inbox every morning.