The striker is free to play against Standard midweek.
The governing organisation accepted the motion lodged by the north London club in reaction to a diving ban stemming from a play-off match versus Celtic last month.
Eduardo apparently dived to win a penalty kick versus the Glaswegian side at the Emirates, but referee Manuel Gonzalez awarded the spot-kick.
But having renviewed the evidence, UEFA said on Monday, "Following examination of all the evidence, notably the declarations of both the referee and the referees' assessor, as well as the various video footage, it was not established to the panel's satisfaction that the referee had been deceived in taking his decision on the penalty."
The Croatian, the target of much derision in recent weeks from opposition fans, was originally handed a two-match suspension for simulation on September 1 by the UEFA Control and Disciplinary Body for 'deceiving the referee'.
This was the culmination of an protracted enquiry that Gunners manager Arsene Wenger branded a "witch-hunt".
Jeremy Brown, Goal.com UK