"Following a meeting yesterday with the minister… the MPs withdrew their impeachment motion," the Aftab-e Yazd newspaper said.
"The government reached agreement with parliament on making up the shortfalls in the education budget," the Mehr news agency quoted Ali-Ahmadi as saying.
"The teachers' demands will be met soon," he said, vowing that 10,000 school staff working under short-term contracts will be offered permanent employment by the start of the academic year on September 23.
Eighty-two of parliament's 290 MPs had backed the move to impeach the minister, who was only appointed in February after his predecessor was sacked by President Mahmoud Ahmadinejad.
The MPs had accused Ali-Ahmadi of "ignoring the financial problems faced by teachers all over the country" and said his "incompetence in managing affairs has caused at least 90 percent of teachers to be dissatisfied with him".
Schoolteachers in Iran earn between 300 and 400 dollars a month, barely enough to make ends meet, particularly in the capital. Many teachers are forced to take second jobs in the private sector.
Last year, school staff held a string of demonstrations over low salaries that included three unusually large protests outside parliament within a week in March.
