Wireless Festival has been given permission to remain in London's Finsbury Park, provided performers do not swear or wear "offensive" clothes.
Haringey Council granted festival promoter Live Nation a licence after a review called for by campaigners.
Friends of Finsbury Park had complained about noise levels, drug taking and anti-social behaviour at the festival.
The council's licensing committee decided to amend conditions rather than revoke the licence altogether.
Conditions include a "request that performers do not sing or play any vulgar, obscene or banned songs or carry out indecent acts or make any vulgar gestures, actions or remarks during the performance" and that performers do "not offend the general public, e.g., attire which expose the groin, private parts, buttock or female breast(s)".
The last day of the festival will now finish 30 minutes earlier at 21:30 BST and new sound level limits and monitoring will be put in place.
The event, which attracted crowds of more than 37,000 people this year, sparked 67 complaints over noise, anti-social behaviour, drug dealing and litter damage, according to the Local Democracy Reporting Service.
Philip Kolvin QC, the barrister representing Live Nation, told a review hearing earlier this month that the "impacts are mostly contained and limited in duration" and that Live Nation was "committed" to the "possibility of improving year-on-year".
Wireless Festival "reflected and celebrated" Haringey's "young and ethnically diverse" character as a borough, Mr Kolvin added：
"Wireless is a celebration of grime music. It is a music genre that emerged from London; it is London music," he said.