An EU parliament statement hailed the move as "a step in restoring parliamentary dialogue with China" but warned that it would remain vigilant on human rights questions.
China and the EU are to hold a summit in July to mark 50 years of formal relations.
China imposed sanctions, including a ban on the five deputies and their families from entering Chinese territory in 2021. It was ordered in reprisal for international sanctions taken against China over its treatment of the Uyghur minority in Xinjiang region.
The European parliament froze all political dialogue with China, though it has been progressively resumed since September last year following a Beijing request.
Party leaders in the EU parliament said in the statement that the lifting of sanctions "does not mean the European parliament will overlook persistent challenges in EU-China relations.
"Parliament will remain a strong defender of universal human rights and fundamental values worldwide while seeking to engage with global partners in a principled and clear-eyed manner," the statement said.
Chinese authorities have not confirmed the lifting of the sanctions.
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