Powell, the former 100-metre world record holder, and Simpson were both suspended for 18 months but the bans were reduced to six months on appeal, leaving them free to compete immediately, the CAS announced.
The pair were suspended by a Jamaica Anti-doping disciplinary panel after testing positive for the banned stimulant oxilofrine, which they claimed had been taken in a contaminated food supplement.
They appealed to CAS to have their bans reduced to three months and the appeals were partially upheld. As they have already served six-month bans, they are now eligible to compete again.
"CAS has upheld in part the appeals filed by the Jamaican sprinters Asafa Powell and Sherone Simpson against the decisions of the Jamaica Anti-doping disciplinary panel imposing a suspension of 18 months on both of them, starting on June 21st 2013," a statement on CAS website said.
The CAS said it decided to reduce their period of ineligibility to six months, which has been already served.
The athletes were already free to compete since June 18th after the CAS had granted a stay of the decisions of the Jamaica Anti-doping Disciplinary Panel of April 8th and 10th 2014.
Both athletes filed appeals at CAS against their 18-month suspension.
"They put forward that the offence committed was minor because it was caused by contamination of the food supplement "Epiphany D1" by the banned substance Oxilofrine and requested that the suspensions be reduced to three months," the CAS said.
They were heard at a hearing which took place on July 7th and 8th in New York."
Powell expressed his relief on his Twitter feed, saying: "Thank u to The Court of Arbitration for Sport. Finally this weight has been lifted off my shoulders. Justice has been served. Now let's run!"
The 31-year-old added he would make an instant return to the track in Lucerne on Tuesday.
Simpson, who will also be in Lucerne, issued a statement which she published on Powell's website.
"I feel total relief and that we have finally been vindicated," she said.
"We both knew that we had done all we could to ensure the supplement was okay before taking it . . . our actions were not intentional and CAS has recognized that. I am truly thankful."