Following a VAR review, Balbuena was sent off by referee Chris Kavanagh in the 81st minute after he planted his studs into Ben Chilwell’s legs while effecting a clearance.
The Paraguay international was expected to miss Champions League-chasing West Ham United’s upcoming games against Burnley, Everton and Brighton and Hove Albion but will now be available for those matches.
The Hammers confirmed the former Corinthians defender’s availability for their upcoming games with a tweet that read: 'We can confirm that Fabian Balbuena's red card in Saturday's Premier League fixture against Chelsea has been overturned on appeal. The defender will now be eligible for our trip to Burnley.'
An FA statement read: 'An independent regulatory commission has removed Fabian Balbuena's three-match suspension following a successful claim of wrongful dismissal.'
West Ham manager David Moyes was livid with the decision to send Balbuena off, telling Sky Sports on Saturday: "I think it's a decision made by somebody who's never played the game. I don't know where Fabi Balbuena is supposed to plant his foot.
"If they do think that, you'll look at the one a few minutes later, with Coufal and Rudiger, a similar challenge, but they never did anything about it.
"I don't know how it's a red card. I don't know where he's supposed to plant his foot. I don't think for one minute there's a bit of malice in that. I thought it was a rubbish decision."