Regulators on Friday approved a revamped battery system for Boeing's 787 Dreamliner, a crucial step in returning the high-tech jet to service after it was grounded for over three months because of lithium-ion batteries that caught fire.

The Federal Aviation Administration said it approved a package of detailed design changes, a move that will let Boeing issue a service bulletin and make repairs to the fleet of 50 planes owned by eight airlines worldwide.

(Read More: Trader Bets Boeing Will Soar: Stutland)

"Next week, the FAA will issue instructions to operators for making changes to the aircraft and will publish in the Federal Register the final directive that will allow the 787 to return to service with the battery system modifications. The directive will take effect upon publication," the agency said.

"The FAA will require airlines that operate the 787 to install containment and venting systems for the main and auxiliary system batteries, and to replace the batteries and their chargers with modified components."