Costa cleared to face Real in city derby
The Brazil international had picked up a fifth booking, which triggers an automatic one-game suspension, in Atletico's 1-0 victory at Sevilla on Sunday.
Costa, with seven goals in La Liga, is likely to return to partner leading scorer Radamel Falcao at the Calderon, as third-placed Atletico look to overhaul their neighbours in the standings.
Second-placed Real have a three-point advantage with six games left to play, but trail leaders Barcelona by 13.
A defeat for Jose Mourinho's side, combined with a victory for Barca at Athletic Bilbao on Saturday, would see the Catalans crowned champions for the fourth time in five years.