Wales Coach Warren Gatland will now name his starting XV tomorrow ahead of the opener at Twickenham.
Byrne appealed against the original ban after taking advice from lawyers who were instructed by the WRU to help him decide on a course of action.
He was represented at the Glasgow appeal hearing by the WRU appointed QC Adam Lewis, who was supported by Gareth Williams, senior partner of the Cardiff law firm Hugh James, the WRU's external lawyers.
The Group Chief Executive of the Welsh Rugby Union, Roger Lewis, said: "I am delighted that the independent appeal committee have reached this decision which is great news for Lee Byrne and for Wales.
"It has been an extremely difficult time for the player, but we have been determined to give him all the support he needed to achieve this fair resolution of a difficult matter.
"It has not been an easy decision either for the original independent committee hearing the evidence or the appeal panel and I applaud them all on their diligence in this matter.
"I hope this sends out a message to the followers of Welsh rugby that the WRU is an organisation which will always stand by individuals who deserve and need our help.
"We sat down with Lee as soon as the original penalty was announced and started to plan for the appeal.
"There have been a lot of meetings and discussions over the past days but it has all been worthwhile because we are now celebrating an important victory for all concerned.
"I know how hard all the players, coaches and backroom staff in the national squad work for success and they must always be confident that the WRU will stand firm in support of all their efforts.
"We want every player who pulls on a Welsh jersey to know that we are with them all the way. Now it's back to business and we can all look forward to a great game of rugby at Twickenham."