"We have today cleared Udta Punjab under A (restricted for adult audience) category after 13 cuts," Nihalani told reporters on the sidelines of a function here.
Nihalani, who was in the eye of the storm over suggesting a very large number of cuts, said nine members of the Central Board of Film Certification watched the film and "unanimously" cleared it after the proposed 13 cuts.
"The CBFCs job is now over. It is now up to the producer to go to the court or tribunal. We will implement the order," Nihalani said.
The Abhishek Chaubey-directed film is tentatively scheduled for release on June 17.
The CBFC's revising committee had suggested a number of changes in the movie, which stars Shahid Kapoor, Alia Bhatt, Kareena Kapoor-Khan and Diljit Dosanjh, and deals with the problem of drug addiction among youth in Punjab.
Meanwhile, responding to a query, Nihalani, who has been criticised by the film fraternity for his "dictatorial attitude" said, "those call me cheap are themselves 'ghatia' (lowly)".
Nihalani clarified that he never called himself as "chamcha" (sycophant) of Prime Minister Narendra Modi.
"There is nothing wrong in admiring the Prime Minister. I never said (I am) a chamcha," he said. The makers of the movie, Phantom Films had approached the Bombay High Court against an order of the revising committee of CBFC that suggested certain changes in the film.
A string of changes proposed included removing a signboard mentioning Punjab and other suggestions.
The HC had on Friday said that the makers of 'Udta Punjab' should tone down expletives and vulgar scenes as these alone cannot make a film work.
A division bench had concluded hearing arguments on the petition and is expected to pass order in the case tomorrow.
In Punjab which is set for assembly polls next year, the opposition parties had accused the ruling SAD-BJP of using influence to "censor" 'Udta Punjab'.
However, Punjab Deputy Chief Minister Sukhbir Singh Badal said the government had "nothing to do" with the movie and that the matter was between the producers and the Censor Board.
Badal's rival and Punjab Congress Chief Amarinder Singh said he has written to producers of 'Udta Punjab', requesting them to provide him uncensored CDs of the film to release it in Amritsar on June 17.
Film's co-producer Anurag Kashyap got support of BSP supremo Mayawati who said there was "nothing wrong" with 'Udta Punjab' and that the party supported it.
The I&B ministry had sought to distance itself from the controversy, saying the certification process was independent. I&B minister Arun Jaitley had, however, said radical changes in the certification process were in the offing.
The ministry had earlier formed a committee under filmmaker Shyam Benegal to look at the functioning of the censor board. The panel has already submitted the first part of its report.
