Former Romania and Turkey coach Lucescu, who turns 75 on Wednesday, had decided to leave Dynamo only four days after being appointed as coach.
Dynamo's fans had been furious about Lucescu's appointment as he had previously transformed Dynamo's bitter rivals Shakhtar Donetsk into a force to be reckoned with in Europe.
Lucescu said in a statement on Monday that it was impossible for him to work in a "hostile environment".
A day later, however, he assured Dynamo president Ihor Surkis that he would take charge at the club.
"Dear Mr President, I deeply respect your steadfastness in the development of FC Dynamo," Lucescu said in a statement published on Dynamo's website.
"My fears were related only to not creating difficulties for the football family of the Kyiv club.
"I am sure that together with you we will achieve those significant results that will radically change the attitude towards my appointment and the future work of the club under my leadership."
After joining Shakhtar in May 2004 Lucescu won eight Ukrainian league titles, five national cups and most significantly claimed the Europa League title in 2009 to become the club's most successful coach.
Lucescu, who also coached Inter Milan, Turkey's Galatasaray and Besiktas, Russia's Zenit St Petersburg and several other clubs, replaced Oleksiy Mykhaylychenko, who was sacked last week after Dynamo's disappointing league season.
"Together we take on new challenges and together we continue to write the glorious history of Dynamo," Surkis said. "We hope that the legendary Mircea Lucescu will leave his bright page in this chronicle."
Dynamo, Ukraine's most successful and popular club with 15 league titles since 1993, finished second in the league but 23 points behind Shakhtar, who have won the championship for the last four seasons.
