Headley, 23, appeared at a hearing in Mercer County, New Jersey, Superior Court, and pleaded not guilty to charges of credit card theft stemming from a 2016 arrest.
"Today is a great day for Jazmine, her mom and her little boy," said Headley's attorney, Brian Neary.
Judge Peter E. Warshaw allowed Headley to enter a 36-month program for first-time offenders to resolve the old case.
Under an agreement with the court, Headley must also perform 20 hours of community service and make restitution in an amount yet to be determined, the Mercer County Prosecutor's Office said in a statement.
"This is a not guilty plea and after the passages of time, the case will be dismissed and ultimately her criminal record will be expunged," Neary said.
Wednesday's hearing was hastily scheduled after Headley was released Tuesday night from Rikers Island jail in New York City, where she was booked Friday after being arrested at a city Human Resources Administration (HRA) office in Brooklyn.
She was released from Rikers after the Brooklyn District Attorney's office dropped charges against her stemming from the confrontation at the social services office, in which New York Police Department (NYPD) officers and HRA guards were seen in a viral cellphone video wrestling Headley and yanking her 1-year-old son, Damone, from her arms.
Following her release, Scott Hechinger, one of Headley's attorneys from the Brooklyn Defender Services, tweeted a photo of Headley being reunited with her son and her mother.
"This is what love looks like," Hechinger said.
New York City Mayor Bill de Blasio has called for an investigation of the incident.
The mayor said Wednesday that the HRA officers should have de-escalated the situation before calling in city police officers.
"I believe by the time the NYPD arrived, the situation was already out of hand and should not have been," de Blasio said.
He called the episode "deeply troubling" and "100 percent unacceptable."
"It cannot happen again," he said. "We will not allow it to happen again."
NYPD officials said in a statement that they were called to the city HRA office in Brooklyn just before 1 p.m. on Friday.
"The NYPD was called after office staff and HRA peace officers made unsuccessful attempts to remove this individual from the facility due to her disorderly conduct towards others, and for obstructing a hallway," police said.
Lisa Schreibersdorf, executive director of Brooklyn Defender Services, said Headley went to the social services office to determine why daycare vouchers for her child were suddenly cut off.
When Headley arrived at the crowded office there were no seats available. So Headley and her son sat on the floor and waited for four hours.
Headley's mother, Jacqueline Jenkins, who witnessed the incident, said the HRA guards told her daughter she could not sit on the floor because she was blocking a hallway. When she refused to stand, a supervisor called the police, she said.
The video of the violent confrontation drew outrage from city officials, including New York City Council President Corey Johnson and Brooklyn Borough President Eric Adams, Corey Johnson, who demanded an investigation and Headley's release from jail.