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Anna's sacrifice is the act of true love that melts her heart, and Elsa realizes that love will melt all of the snow and ice caused by her powers as well. With summer finally restored in the kingdom, what happens to Olaf?
Answer: He survives under a personal cloud given to him by Elsa.
When Elsa sees that Anna has frozen, she becomes even more upset and hugs her. But, suddenly Anna begins to melt. The act of true love had to be preformed by Anna because it was her heart that needed to thaw and sacrificing her life to save someone she loves did the trick. As this time, Elsa discovers that love will melt the winter she created. As the summer is restored, Olaf also begins to melt, but Elsa saves him by creating a small cloud to follow him around and snow on him.
Everything becomes right again in the kingdom. Hans is sent back to the the Southern Isles to be punished. Anna and Elsa become close sisters once more. Kristoff receives a new sled from Anna and becomes the Official Ice Master for the kingdom. He and Anna also share their first kiss. The movie ends with Elsa creating an ice rink in the castle's courtyard and saying that the gates will never be closed again.