Fifa have granted the French side's appeal and the Hammers have now submitted the necessary information.
Said Benrahma will join Lyon after his transfer was delayed due to an admin error
Benrahma is expected to seal his transfer in the next few hours.
The Algerian winger was set to sign for his new club on deadline day - only for the deal to seemingly collapse at the last minute.
Lyon had done all the media work and had cameras ready for a live announcement.
But an admin error saw West Ham fail to submit their side of the deal to Fifa's Transfer Matching System (TMS).
TMS is the online system used by Fifa to approve deals once all details have been agreed between the clubs. Fees, bank account numbers and agent details must all be entered for the transfer to go through.
As Lyon lodged an appeal, they blasted David Moyes' team in a brutal statement.
It read: "Olympique Lyonnais deeply regretted the failure of Benrahma's transfer, for reasons beyond his control, and questioned West Ham's behaviour in failing to finalise the required administrative procedures, despite all the agreements made.
"The two clubs had signed a temporary transfer agreement.
"However, early in the evening, while Olympique Lyonnais had entered all the administrative data on Fifa's dedicated platform, Fifa TMS, West Ham had never initiated the slightest technical procedure of their own, despite repeated reminders from OL and continuous mutual telephone communication.
"In the absence of this reciprocal action from the English club and due to this incomprehensible behaviour, raising questions, the international transfer certificate could not be requested before the deadline.
"Olympique Lyonnais deeply regrets this situation and this decision, which shows a profound lack of respect on the part of West Ham towards both the Institution and the player.
"The club reserves the right to initiate all procedures to validate the transaction after the event, and to hold West Ham responsible if necessary."
The ruling on Benrahma's transfer could also see Pablo Fornals join Real Betis.
He was also left in limbo after his move was not announced prior to the deadline.
Fornals was reportedly hooked from the West Ham bench for their clash against Bournemouth at the last minute to undergo a medical.
The Irons were unable to sign any direct replacements as proposed switches for Ibrahim Osman and Jota fell through earlier in the week.
However, the East Londoners did snap up Kalvin Phillips on loan from Manchester City on loan until the end of the season - but he had a nightmare start to his West Ham career.
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