A temporary ban was put on placements at Feltham A after an intelligence-led July inspection by Peter Clarke found an escalation in violence and self-harm.
An action plan was published in August by the Ministry of Justice and a risk assessment has now led to a decision by the Youth Custody Service to re-open the YOI to new prisoners, up to a limited cap of 100.
The establishment can hold up to 140 young people, mainly aged 16 and 17.
In a report published today, Clarke cautions: "I hope this decision proves to be well founded."
Clarke adds: "I hope that at long last there will be a recognition that Feltham, if it is to remain as an institution holding children in custody, must change in a more radical way than at any time in its troubled history.
"Short-term improvements followed by dramatic and dangerous declines should no longer be tolerated.
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"I chose to invoke the Urgent Notification process not only because of the dire findings of this inspection, but also because it gives the opportunity for the Secretary of State to bring his personal authority to bear to demand decisive action and bring about lasting change."
Clarke describes how school-age children are unable to access rehabilitation including education and training, "because of the practice of containing the behavioural problems of the boys rather than addressing them".
He continues: "This has led to a collapse of any reasonable regime, prevented many children from getting to education or training, delayed their access to health care, isolated them from meaningful human interaction and frustrated them to the point where violence and self-harm have become the means to express themselves or gain attention."
Children's rights organisations have long been urging an end to child imprisonment and have underlined these calls as a result of the findings.
Carolyne Willow, director of Article 39, said: "As we celebrate 30 years of the Children Act 1989, this report brings shame on us all but especially on those politicians who have, over successive administrations, dodged their responsibilities to protect incarcerated children.
"Children should be nowhere near Feltham prison, the institution must close.
"Every day it remains open is a day that ministers are prepared to have children terrified, uneducated, abandoned and cast aside.
"A civilised country protects and provides for all of its children, including the ones we find difficult and challenging."
The Ministry of Justice said that it had made "immediate changes" to strengthen staffing, tackle violence and temporarily stop new placements into the establishment, following the July inspection.
The spokesman added: "Young people at Feltham A can now access a full regime and there has been a sustained reduction in levels of self-harm, the use of force and the number of assaults on staff.
"Young offenders also have far better access to showers, more time out of their rooms and are more likely to attend their education classes.
"The full range of improvements will need time to take effect, but progress is being made - a credit to the governor and her staff who care deeply about the safety of those in their custody."