Botha, 31, was reported for a suspect bowling action while playing for South Australia and was ordered to undergo biomechanical analysis.
The tests at the Australian Institute of Sport last Wednesday saw Botha bowl six each of his off-break, quicker ball and "flicker ball" in front of a 20-camera system recording at 250 frames per second.
A Cricket Australia statement read: "The testing found that Botha's action for all deliveries is under, or equal to, the allowable elbow extension of 15 degrees, with an average extension of nine degrees."
CA senior manager for cricket operations Sean Cary said: "The process for dealing with these matters is an international standard testing procedure.
"The bowling action in question has been assessed and we accept the results from the testing. Johan is free to continue playing for South Australia and Adelaide Strikers."
Botha had been cited by umpires Simon Fry, Michael Graeme-Smith and Geoff Joshua in the Ryobi Cup match between South Australia and Victoria at Bankstown Oval on Friday 4 October.
It is the third time he has been reported for a suspected illegal action. He has been allowed to return to bowling on each occasion, though his doosra was ruled illegal after tests conducted in April 2009 found an average elbow extension of 26.7 degrees.