A no-fly zone, border closures and asset freezes were among the measures being stopped "with immediate effect" on "humanitarian grounds," ECOWAS Commission chief Omar Alieu Touray said following an emergency heads of state summit in Abuja, the Nigerian capital.
Niger's president Mohamed Bazoum was ousted in a military coup last July, prompting ECOWAS to suspend trade and impose tough sanctions.
But the bloc's warning of military intervention has fizzled out with little sign that Bazoum — still imprisoned in the presidential palace in Niamey — is closed to being restored.
Touray called for Bazoum's "immediate release" at the Abuja summit.
He said the measures to be lifted included the freezing of Niger's assets in ECOWAS central banks and the suspension of financial transactions between ECOWAS states and Niger.
But Touray told AFP "individual sanctions as well as political sanctions remain in place in Niger... (and) in other countries political sanctions remain."
Nigeria's President Bola Ahmed Tinubu had urged worried West African leaders to rethink their strategy on the region's coup-hit states at the start of the summit.
West Africa has been beset by a series of political crises and Tinubu told the leaders they were meeting at a "critical juncture".
Following recent coups in Mali, Burkina Faso, Niger and Guinea, Tinubu — who is also head of ECOWAS — said "we must re-examine our current approach to the quest for constitutional order in four of our member states".
The four have been suspended from the organization and were not represented at the summit.
Mali, Burkina Faso and Niger declared their intention to permanently withdraw from the bloc in January, but ECOWAS has called for them to return.
Tinubu urged them to "reconsider the decision" and said they should "not perceive our organization as the enemy".
The three countries' new military leaders have accused former colonial power France of instrumentalizing ECOWAS, and they have pushed out French ambassadors and forces while turning politically and militarily towards Russia.
Senegal’s turmoil
West Africa has also been rattled by President Macky Sall's sudden decision to delay elections in Senegal.
Sall has faced growing calls to set a date for the presidential election after his postponement of the February 25 poll triggered weeks of turmoil.
Sall attended Saturday's summit and Touray said ECOWAS leaders had "taken note of the end of President Macky Sall's term of office on April 2".
He urged all parties to prioritize dialogue to achieve "free, fair and inclusive elections."
On Saturday, Several hundred people demonstrated in Dakar calling on Sall to set a date to elect his successor before his term ends on April 2.
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