The stewards, after hours of deliberation in a decision published after midnight in Austria, decided the protest was "not founded".
"The Stewards believe DAS is part of the steering system, albeit not a conventional one," they ruled. "The key challenges to the legality of DAS rely on it not being part of the steering system.
"The stewards decide that DAS is not in breach of the suspension‐related regulations."
Mercedes team boss Toto Wolff had earlier welcomed a clarification.
"We think we are on the right side. There was a lot of talking and exchange with the FIA, that is the reason why we have it on the car," he added before the verdict.
"Controversy and different judgement on engineering innovation has always been part of Formula One. This is what's to be expected in a way. It's part of the racing."
The stewards reminded Red Bull of their right to appeal certain decisions within time limits.
Mercedes are chasing a seventh successive title double this season. Red Bull were third overall last year but could be the German manufacturer's biggest challengers in 2020.
Stewards reject Red Bull protest against Mercedes
Image: Getty Images/Getty Images
Formula One stewards rejected on Friday a Red Bull protest against a new steering system used by champions Mercedes in practice for the season-opening Austrian Grand Prix.
The action concerned the cars of six-times world champion Lewis Hamilton and Finnish team mate Valtteri Bottas, with Red Bull questioning the legality of the Dual Axis Steering (DAS) system.
Mercedes, who dominated practice with Hamilton fastest in both sessions, were running the system for the first time at a race weekend.
The governing FIA has already banned DAS for 2021, despite the cars remaining the same due to new rules being postponed to 2022.
Red Bull team boss Christian Horner said it was a 'grey area' of the rules and asked why it should remain legal this season.
DAS allows a driver to change the 'toe angle' of the front wheels by pushing and pulling on the steering wheel, rather than just moving it sideways.
Mercedes one-two as F1 gets back on track in Austria
The stewards, after hours of deliberation in a decision published after midnight in Austria, decided the protest was "not founded".
"The Stewards believe DAS is part of the steering system, albeit not a conventional one," they ruled. "The key challenges to the legality of DAS rely on it not being part of the steering system.
"The stewards decide that DAS is not in breach of the suspension‐related regulations."
Mercedes team boss Toto Wolff had earlier welcomed a clarification.
"We think we are on the right side. There was a lot of talking and exchange with the FIA, that is the reason why we have it on the car," he added before the verdict.
"Controversy and different judgement on engineering innovation has always been part of Formula One. This is what's to be expected in a way. It's part of the racing."
The stewards reminded Red Bull of their right to appeal certain decisions within time limits.
Mercedes are chasing a seventh successive title double this season. Red Bull were third overall last year but could be the German manufacturer's biggest challengers in 2020.
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