Barcelona forward Fati became the club's youngest LaLiga goalscorer when he found the net against Osasuna in August at the age of 16.
Fati was left out of Spain's most recent senior and Under-21 squads, with the latter's coach Luis de la Fuente confirming he was not yet eligible.
Born in Guinea-Bissau, Fati also had the option to represent Portugal at international level, but has been granted Spanish citizenship and chosen to play for La Roja.
And the Royal Spanish Football Federation confirmed on Thursday that FIFA has now granted Fati permission to represent Spain at international level.
Spain's youth team sporting director Francisco Hernandez suggested Fati could be fast-tracked into the senior squad.
"We have taken the decision not to include him in this [World Cup] squad," he said.
"This was following a wider sporting review in that we consider him in a better position to play with an older category and for that to be the case, he cannot come to the Under-17 World Cup.
"We want him to star for the senior team as soon as possible."
Spain senior squad coach Robert Moreno said Fati was on his preliminary list for the current international break.
"We thought he could do well," he said. "He was on the preliminary list, we value him, there were a number of events that have been going on, bureaucratic issues after he was injured and we could not summon him.
"Allow me for this exception when talking about someone who is not on the list, but he was a special case that had to be treated in an honest way."