Coach Mark Dantonio said Scott's status would be affected because of the arrest but that the team's leading rusher at the halfway point of the season would be on the field against the Hoosiers.
"In what has been a lengthy process, LJ Scott now has a valid driver's license, free of any restrictions," Dantonio said in a statement released by the school Friday afternoon. "He has resolved the matter completely, and has paid a price, both financially and publicly. His status will be affected for Saturday's game, but he will play."
Dantonio did not expand on any possible discipline.
Police in East Lansing arrested Scott on Wednesday, and the junior from Hubbard, Ohio, was arraigned on charges of driving with a suspended license. According to court records, the incident was the seventh time he has been arrested in Michigan or Ohio for issues with his license in the past two years.
The Lansing State Journal reported Thursday that Scott had previously paid more than $1,000 in fines and was found guilty on a minor misdemeanor and several civil infractions as a result of the series of traffic stops.
In one instance, Scott was initially charged with leaving the scene of an accident. Police also said on a separate occasion that they pulled him over with an open container of alcohol in the car but that Scott was able to pass a sobriety test.
Scott told reporters in East Lansing last month that he did not have a driver's license before his 21st birthday in the middle of September.
Lt. Chad Connelly of the East Lansing Police Department said Scott appeared in court Friday to try to get his license issues resolved. Connelly said he couldn't comment on the result of that visit or the initial issues with Scott's license.
Scott's lawyer, James Heos, did not return a request for comment this week.
No. 18 Michigan State won its fifth game of the year last weekend as Scott rushed for a career-high 194 yards against Minnesota.