Suarez was appealing his suspension from all football activity, a sanction imposed by FIFA after the striker bit Italy's Giorgio Chiellini during Uruguay's 1-0 World Cup victory on June 24.
The news means he will now be allowed to play for Barca in the Joan Gamper Trophy against Mexican side Leon Guanajuato on Monday - a game you can watch live on Sky Sports 5 - ahead of a return to competitive action on October 25.
However, Suarez will still miss Barcelona's first eight league matches of the new season, plus their first three group games in the Champions League. He could make his La Liga debut against Real Madrid on Sunday, October 26.
A statement from CAS read: "The sanctions imposed on the player by FIFA have been generally confirmed. However, the four-month suspension will apply to official matches only and no longer to other football-related activities (such as training, promotional activities and administrative matters)."
"The CAS Panel found that the sanctions imposed on the player were generally proportionate to the offence committed.
"It has however considered that the stadium ban and the ban from "any football-related activity" were excessive given that such measures are not appropriate to sanction the offence committed by the player and would still have an impact on his activity after the end of the suspension."
CAS Secretary General Matthieu Reeb told Sky Sports News HQ: “The suspension has been adapted – it will now only apply to official matches and no longer to other football related activities such as training or promotional events.
“It is my understanding that friendlies are not considered official matches in accordance with FIFA regulations.
“The FIFA decision probably went a little too far – the player being unable to train would probably be effective for longer than four months so the panel thought it was fair to limit the ban so that he can be ready to play at the end of October.”
Barcelona paid Liverpool £75m for Suarez after he received his original worldwide ban. He was also handed a nine-match international ban and £66,000 fine following the incident; those punishments still stand.
His legal team argued that as the incident took place while the striker was playing for his country the sanctions should be limited to international football.
The three-man panel of CAS arbitrators consisted of the president, Mr Bernhard Welten from Switzerland, his compatriot Dr Marco Balmelli and Professor Luigi Fumagalli from Italy.
Watch Luis Suarez's first friendly game for Barcelona against Mexican side Leon Guanajuato live on Sky Sports 5 on Monday August 18 at 6.30pm.