Kylie Fullerton, who teaches at Glen Eden Intermediate School in Auckland, is understood to have uploaded a photograph of herself in a red bikini on her profile page. Another photo of her posing in black lace underwear, a white shirt and high heels was also on the page, which had details of where she worked.
The school's board of trustees was forced to review Ms Fullerton's, 34, conduct after the photos were circulated amongst students.
They found she had not violated any professional standards, TVNZ reported today.
Board chairman Patrick Baker and principal Terry Hewetson informed parents of their decision on Wednesday via newsletter.
They also lashed out at media reports of the incident.
The newsletter said there were no links between Ms Fullerton's page and the school website and students did not have access to it, TVNZ said.