The relic of forgerer Elizabeth Johnson, who was put to death on the Knavesmire in 1800, was stolen from The Golden Fleece at 1am on New Year's Day. It has been kept in a glass display case at the inn since a date unknown.
A drunken reveller was suspected and police have now tracked down the man responsible and resolved the matter without taking the prank to court.
Johnson, who issued a forged £1 banknote, was the last person to be executed on the Knavesmire, near York Racecourse.
Although the pub's Facebook appeal to find the thief was unsuccessful, they recovered CCTV footage of the culprit and this was passed to police.
Cameras in the city centre were also used to identify the man - who was keeping the gruesome relic on his mantelpiece.
North Yorkshire Police said: "A man in his 20s immediately admitted the theft and proceeded to show police to his fireplace where Elizabeth’s skull was placed on top. The offender was dealt with via an out of court disposal and has since written a letter of apology.
"And our officers were delighted to be able to return Elizabeth back to where she belongs in the pub."
The Golden Fleece clarified that the skull is in fact a replica, though it was cast and donated at the time of Johnson's hanging and the story of its origins has become 'lost in time'.