The comedy star was reported to have had his tickets rescinded because he wanted to walk down the red carpet dressed up as spoof character General Aladeen from his new movie The Dictator - before changing into a tuxedo for the ceremony.
But an Academy Awards spokesperson told The Hollywood Reporter: "We haven't banned him. We're just waiting to hear what he's going to do."
The spokesperson said of the stunt: "We don't think it's appropriate ... but his tickets haven't been pulled. We're waiting to hear back."
Deadline reported that the star had effectively been banned from this weekend's Academy Awards because his tickets were being pulled unless he promised he would not go through with his plans.
Sacha, who was invited to attend the Oscars as a cast member of best picture nominee Hugo, has a history of pulling stunts at awards ceremonies.
He flew through the air at the MTV Movie Awards and landed with his bare backside on Eminem's face - in a fake mishap - to promote gay fashionista Bruno in 2009.
In 2006 he arrived at the Toronto International Film Festival as Borat on a carriage pulled by "peasant women".