According to sources, the Australian government decided to revoke the Austrian-born architect's citizenship more than 19 years ago.
However Seidler, 82, who became an Australian national in 1938 following his escape from Nazi-occupied Austria, only found out about his 'illegal status' when he tried to change his address.
It appears that in 1985 the Austrian authorities had unexpectedly - and without announcement - reinstated his citizenship in Austria and the Australian government would not allow Seidler to hold citizenship of both countries.
The discovery made front-page news in Sydney, where the architect has designed a number of landmarks including Australia Square, and fuelled renewed criticisms of the state's immigration department.
The department has recently been under fire for the wrongful deportation of Australian citizens and has also been investigated for the wrongful detention of about 200 people.
Minister for citizenship John Cobb said yesterday that the decision to revoke Seidler's citizenship had been reversed because the architect had not 'deliberately sought' to become an Austrian citizen.
A founding member of the Australian Architecture Association and an RIBA Gold Medal Winner, Seidler is currently recovering from a serious stroke.