It also said it has accepted a request from the Yale-NUS College to screen the film on Singapore's political exiles, for classroom teaching and discussion only.
The 70-minute documentary, by local film-maker Tan Pin Pin, 44, received a "Not Allowed for All Ratings (NAR)" classification from the MDA last Thursday.
That was because the film's contents "undermine national security" and distort the legitimate actions of security agencies as acts that victimise innocent individuals, the MDA had said.
About 50 Singaporeans started to line up to get preferred seats an hour before the screening of a documentary film on Singapore's political exiles which cannot be shown in public or distributed in Singapore.ST PHOTO: RACHEL AU-YONG
Films classified as NAR are not allowed for public exhibition or distribution.
In its most recent statement on Friday, MDA said it "recognises that lecturers and students of media or related courses at tertiary institutions may require access to a wider variety of films, including films that are classified R21 or NAR.
"Some leeway is provided to these institutions to screen films for educational purposes, on condition that these films have either been previously classified by the MDA, or prior approval has been sought from the MDA before the films are acquired."
Also on Friday, more than 350 Singaporeans crossed the Causeway to Johor Baru to catch Tan's film, which was showing as part of an annual Freedom Film Festival.
The film has already been shown in Petaling Jaya and will go to Kuantan and Penang next.
In total, more than 410 people attended, with at least 20 on the waitlist. This was almost triple the number of participants that organisers were anticipating.
Organisers had to book an extra, larger room to accommodate viewers.
The documentary film includes interviews with nine political exiles who fled Singapore and now live in Britain and Thailand. Most were members or supporters of the Communist Party of Malaya, according to the MDA.
It has been touring the international film circuit for about a year, and will make its way to the Philippines and London in the next few weeks.