WADA arrived at the decision "based on a number of factors that are specific to the case of Mr. Froome - including, in particular, a significant increase in dose, over a short period prior to the doping control, in connection with a documented illness; as well as, demonstrated within-subject variability in the excretion of Salbutamol - WADA concluded that the sample result was not inconsistent with the ingestion of inhaled Salbutamol within the permitted maximum dose".
Froome's appeal against the ban was scheduled to be heard on Tuesday by the French national Olympic committee in Paris.
Four-times Tour de France champion Chris Froome looks set to compete in the 2018 event after being cleared of an anti-doping violation that showed twice the permitted concentration of an asthma medication in his system.
"We've raced under trying circumstances at the Tour for the last six years", Team Sky leader Froome told BBC Sport.
"Whilst the UCI would have obviously preferred the proceedings to have been finalised earlier in the season, it had to ensure that Mr Froome had a fair process, as it would have done with any other rider, and that the correct decision was issued".
"Today's ruling draws a line", Froome said.
Lionel Messi and Argentina knocked out of the World Cup
Argentina coach Jorge Sampaoli: "This is very painful, especially because the players have made a huge effort". Sergio Aguero scored in the dying moments of the game to pull Argentina within a goal, but it was too late.
This was due to Froome being able to explain that the salbutamol in his urine sample was from the substance being inhaled and that amount being within the 'permissible maximum dose of 1600 mcg/24 hours, not to exceed 800 mcg per 12 hours'.
"In light of WADA's unparallelled access to information and authorship of the salbutamol regime, the UCI has decided, based on WADA's position, to close the proceedings against Mr Froome".
"We have always had total confidence in Chris and his integrity", Team Sky principal Dave Brailsford said.
In a statement to The Associated Press, Unipublic said it was "satisfied because we finally have a ruling and because we finally know who the victor of the 2017 Vuelta is". Froome's Giro win made him the first man to hold all three grand tours at once since Frenchman Bernard Hinault in 1983.
Le Monde newspaper on Sunday had reported that Tour organizer ASO had informed Team Sky it was forbidding Froome from entering the race until the doping case had been decided. He dubbed Froome a "cheat", and last week called on Tour riders to strike in protest if he starts the race on Saturday.
Froome welcomed the news which means he can attempt to win a record-equalling fifth Tour when the race gets underway in Noirmoutier.