"The investigation did not find that the company or the company commander had acted unethically during the incident," an army statement said.
"If a military police investigation will find otherwise he will be relieved from of any command duty," the statement continued.
The unnamed officer was suspended on Wednesday following the October 5 incident in which 13-year-old Iman al-Hams was shot dead by soldiers in the southern Gaza town of Rafah on suspicion she was carrying explosives in her school satchel.
According to a fellow soldier, the commander then fired into the girl's body several times.
The body was riddled with 20 bullets, including five in the head, the doctor who examined it told AFP.
Following the incident, army chief of staff Moshe Yaalon said soldiers had justified firing at the girl whom they suspected of wanting to distract their attention and lead them away from the tower so Palestinian snipers could shoot them.