The prime minister will face an inquiry into whether he misled Parliament over his denials he had broken lockdown rules.
MPs have backed a motion which will allow an inquiry by the Commons privileges committee after the government made a "humiliating" climbdown over an attempt to block the plans.
Downing Street had tabled an amendment calling for any probe to be delayed until after the Metropolitan police investigation into lockdown breaking gatherings in Whitehall had concluded, but dropped the plans in the face of a significant Tory rebellion.
Tory MPs were instead told not to oppose the Labour-led motion, meaning it passed without a Commons vote.
The inquiry by the committee will seek to establish whether Johnson knowingly misled Parliament after he claimed in December that Covid rules were followed in No.10 at "all times".
In an email sent to Conservative MPs, government chief whip Chris Pincher wrote: "Colleagues should know, following the prime minister's remarks in India that he is happy for the Commons to decide on any referrals to the Privilege Committee, that we will no longer move our tabled amendment.
He added: "The vote on the unamended House business motion will be a free vote for all Conservative MPs."
It is understood government whips had been warned of a signficiant Conservative rebellion which could have seen their amendment defeated.
Speaking during the debate, Conservative MP William Wragg confirmed he had submitted a letter of no confidence in the PM in December, and said he could not "reconcile" himself with Johnson's continued leadership.
"We have been working in a toxic atmosphere. The parliamentary party bears the scars of misguided leadership," he said.
“Its utterly depressing to be asked to defend the indefensible. I have questioned my place in this party in recent months."
Speaking to this week's episode of CSW sister title PoliticsHome's podcast The Rundown as news of the U-turn broke, former minister Stephen Hammond said he believed the amendment had been dropped because it was "causing problems" among fellow Tory MPs.
"I suspect overnight colleagues who have done what I have done and looked at the wording," he said.
"I saw it as I walked through the lobby last night when a whip showed me it and asked what I thought and I said ‘it looks alright but I’ll need to have a look at it’."
He added: "I texted that whip this morning saying ‘having had a look, this isn’t what I thought it was, can you confirm what it actually is’. I am assuming I am not unique in that regard and that others have done the same".
And former Brexit minister Steve Baker also called for Johnson to resign, saying: "The prime minister now should be long gone.
"Really, the prime minister should just know the gig’s up."
But speaking during a two-day trip to India, Boris Johnson denied he had misled Parliament, said he had "nothing to hide".
"People were saying it looks like we are trying to stop stuff. I didn’t want that. I didn’t want people to be able to say that. I don’t want this thing to endlessly go on. But, I have absolutely nothing, frankly, to hide," he said.
"What voters will want to see is the conclusion of the investigation and then I think the House of Commons can decide what to do.
"I will then come back as I’ve said and explain what happened, give a fuller account than I’ve been able to do so far, we will get Sue Gray’s final words on that matter and then I think people will be able to make a judgment."
Labour deputy leader Angela Rayner said the government decision to pull the amendment was "humiliating".
"This is humiliating for Conservative MPs who were being pressured to vote for the government's cover up amendment. The government knew they couldn't win this, the prime minister is bang to rights," she said.
"Tory MPs should do the right thing, respect the sacrifices that their constituents made during the pandemic, and vote in the national interest."
Opening the debate in the Commons this afternoon, Keir Starmer said the motion "seeks to defend the simple principle that honesty, integrity and telling the truth matter in our politics".
"It's a principle that's been cherished by Conservatives for as long as that party has existed, embraced by unionist and nationalist parties alike, but one that still guides members from every political party in this house."
He hit out at claims by some Conservative MPs that the penalty notice was equivalent to a speeding ticket.
"Every time one of these arguments is trotted out, the status of this house is gradually eroded," Starmer said.
The move comes after education secretary Nadhim Zahawi insisted on Thursday morning that MPs should back the government amendment to ensure "due process" was followed.
Speaking to Sky News, Zahawi accused Labour of "playing politics" and described the vote as "shenanigans".
"If you want to play politics with this, then the shenanigans that Labour are attempting today are the route," he said.
"If you want to follow due process then you allow the police to complete their investigation, you allow the Sue Gray report to be published, then the privileges committee can look at that.
"That is what I will be voting for today, the amendment is the right chronology and the right way to follow due process."
Shadow health secretary Wes Streeting said he believed "decent" Tory MPs were torn over how to vote.
He added: "I fear that many of them, despite their misgivings about Boris Johnson... will troop through the lobby like lemmings because they don't have the courage to stand up for what is right."
Boris Johnson, who is on a two day trip to India, insisted he would not resign over the Partygate fines, and claimed he was planning to lead his party into the next general election.
He said: "I think the best thing that we can all do is focus on the things that really change and improve the lives of voters and stop talking about politicians."
John Johnston is a reporter for CSW sister title PoliticsHome, where a version of this story first appeared