The warrant was cancelled at the request of President Gustavo Petro, said Attorney General Francisco Barbosa.
"We verified the legal system and consider that yes, it is possible to suspend the arrest warrant because... peace processes are under way," he said at a public event in Bogota.
Colombia's government and the National Liberation Army or ELN, the last recognized rebel group in the country, resumed formal peace talks in Venezuela in November for the first time since they were suspended in 2019.
Founded in 1964, the ELN has about 3,500 members and has taken part in failed negotiations with Colombia's last five presidents.
It is primarily active in the Pacific region and along the 2,200-kilometer (1,370-mile) border with Venezuela.
Dialogue with the ELN started in 2016 under ex-president Juan Manuel Santos, who signed a peace treaty with the larger Marxist Revolutionary Armed Forces of Colombia (FARC) rebel group that subsequently abandoned its weapons and created a political party.
But talks with the ELN were called off in 2019 by conservative former president Ivan Duque following a car bomb attack on a police academy in Bogota that left 22 people dead.
Garcia, a prominent member of the ELN decision-making body known as the central command, was wanted for the alleged forced recruitment of 71 minors and for alleged participation in the 2019 attack.
Petro, who last August became Colombia's first-ever leftist leader, reached out to the ELN shortly after coming to power in pursuit of his "total peace" policy.
Colombia has suffered more than half a century of armed conflict between the state and various groups of left-wing guerrillas, right-wing paramilitaries and drug traffickers.
An ELN ambush on a military convoy in March that left nine soldiers dead, had cast doubt over the future of the talks, which have continued nevertheless.
The ELN had also refuted an announcement by Petro on New Year's Eve that a ceasefire had been reached with the country's five largest armed groups, including itself.
Colombia has been gripped by violence despite the 2016 peace deal with the ELN, as fighting continues over territory and resources between dissident FARC guerrillas, the ELN, paramilitary forces and drug cartels.
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