"Players he has played alongside all speak very highly of his ability and in particular his character, and we expect him to fit in very well here."
A panel of Jeremy Summers (chairman), RFU rugby operations director Rob Andrew and premiership rugby head of academies and development Corin Palmer upheld Bath Rugby's appeal against an initial decision made last month on the "governing body endorsement", the RFU said.
But the panel said that to ensure that the New Zealander contributed significantly to the development of the game at the top level in the country, he should:
Mentor key Bath Rugby academy players.
Assist in the development of the club's elite England players.
play a leading role in growing Bath Rugby's relationship with the Rugby Players' Association's Player Development Programme.
Assist Bath Rugby in developing its brand within the local community.
An RFU spokesman said: "The panel accepted that Stephen Donald is an internationally established player of the highest calibre who can play an important role in the development of the game at the top level in this country".
Donald was left out of Graham Henry's provisional squad for this year's World Cup, which made it highly unlikely he would play any part in November's competition.
- NZPA