But there will be fewer floats and a shorter marching season because the city can't afford police overtime, officials said on Wednesday.
After days of talks, officials compromised and promised eight days of parades in the run-up to Fat Tuesday, which is the last day before Lent and which falls on February 28 next year.
"We owe it to our ancestors and our children to keep this celebration going. We just can't stop. This is so important for us," said a delighted Arthur Hardy, publisher of the Mardi Gras Guide and a Carnival historian.
"All indicators were that the city just wouldn't be able to pull this off, even as recently as 24 hours ago. Somehow, they managed to pull a rabbit out of the hat."
Shorter than the usual 12 days, next year's Mardi Gras will reflect the decimation of New Orleans' tax base by the exodus that followed the hurricane and the city could not afford overtime for police along the parade routes.
"It is a critical factor for us that we have no additional money," police chief Warren Riley told a news conference.
Some of the krewes, as the Carnival organizations are known, had threatened to move their parades to suburban Jefferson Parish if the city curtailed the parades.
This sounds like there's some life returning to New Orleans.