City, who confirmed their place in next season's European Cup with the 5-0 thrashing of Brighton & Hove Albion, lodged their appeal to CAS in February after Uefa's club financial control body issued the suspension in February.
The investigation followed claims in German magazine Der Spiegel, based on leaked documents, that City's owner Sheikh Mansour was topping up the value of sponsorship agreements, in breach of FFP rules.
James Walker-Roberts looks at what the decision means for City, as well as the future of FFP, and the impact it has on other Premier League clubs...
That appeal has led to the ban being overturned this morning, though an £8.9 million fine has still been imposed due to the lack of cooperation with the Uefa investigation.
It did find they had breached Article 56 of the club licensing and Financial Fair Play (FFP) regulations by failing to co-operate with UEFA's investigation, which is why there is a £9 million fine - reduced from the £25 million UEFA imposed in February.
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But City are unlikely to care too much about that, and what a story it would be if they can follow this up with a first Champions League success.
City launched an initial appeal to CAS to halt the investigation but in November past year that was ruled inadmissible, because the conclusions of the investigation were not known at that point.
"Manchester City welcomes the opening of a formal Uefa investigation as an opportunity to bring to an end the speculation resulting in the illegal hacking and out of context publication of City emails".
UEFA rules require that Financial Fair Play fines - in most cases, prize money deductions - must be redistributed among other clubs who play in the Champions League or Europa League that season.
FFP rules are created to stop clubs running up big losses through spending on players.
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"We deserve to be there because we won it on the pitch".
The initial ruling against Manchester City earlier this year stated that they had been "overstating its sponsorship revenue in its accounts and in the break-even information submitted to Uefa between 2012 and 2016", adding that the club failed to cooperate in the investigation.
City's place in next season's competition means that five sides are now battling out for the final two qualification spots, with just six points separating third-placed Chelsea and Sheffield United in seventh.
City's victory in court will raise fresh questions over how effectively UEFA can police FFP.
With no European football next season and the embarrassment of this season still stinging, City would have focused all of their energies on retaliating in the Premier League.
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