Sako, Iraq's top Christian leader and the architect of Pope Francis' historic visit to the country in 2021, is a key interlocutor between the Iraqi government and its Christian minority.
In July last year, Sako left Baghdad and settled in the autonomous Kurdistan region in northern Iraq after President Abdul Latif Rashid cancelled a decree recognising him as head of the Chaldean hurch.
But the church on Tuesday published a recent decree by Prime Minister Mohamed Shia al-Sudani naming Sako as the patriarch, adding that he "will be responsible" for the church's endowment and properties.
"I will return to Baghdad," Sako told AFP.
"I am very pleased because the rule of law prevailed, which gives more hope to Christians about the respecting of their rights," added the cardinal, who met Sudani in April during a rare visit to Baghdad.
For several months before the presidential decree last year, Sako had been embroiled in a war of words with a Christian lawmaker, Rayan al-Kildani.
Kildani is the leader of the Babylon Movement, whose armed wing is part of Hashed al-Shaabi -- a network of largely pro-Iran paramilitaries that were integrated into Iraqi security forces in recent years.
In a country ravaged by repeated conflicts and plagued by endemic corruption, Sako and Kildani both accused each other of illegally seizing Christian-owned properties.
Kildani, who has been under US sanctions since 2019, accused the cardinal of assuming a political role beyond his religious mandate.
Sako, in turn, said the parliamentarian aimed to gain legitimacy as the sole representative of the Christian community.
Iraq's Christian population has drastically declined since the 2003 US-led invasion that toppled strongman Saddam Hussein, dropping from more than 1.5 million people to around 400,000 today.
Many have fled the violence that has plagued the country over the past 20 years.
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