Fernandez was dismissed by referee Keith Stroud for a challenge on Philippe Coutinho in stoppage time in the League Cup fourth-round tie at Anfield.
Swansea manager Garry Monk vowed that the club would lodge an appeal to the Football Association after his side's dramatic 2-1 defeat against Brendan Rodgers' side.
And the Premier League club on Thursday revealed that the decision had been overturned, meaning Fernandez will not face a three-match ban.
A statement on the club's official website said: "Swansea City can confirm that the Football Association has rescinded the red card shown to defender Federico Fernandez against Liverpool in midweek.
"The Argentinian defender was shown a straight red card by referee Keith Stroud for a tackle on Philippe Coutinho during stoppage time in the 2-1 Capital One Cup defeat at Anfield.
"The tackle was deemed as serious foul play and Fernandez faced a three-match ban, starting with this weekend's Barclays Premier League trip to Everton.
"However, the club appealed against the decision with a written statement and video evidence before an FA appeals panel overturned the red card this afternoon.
"Fernandez is now free to make the trip to Goodison Park on Saturday."
Dejan Lovren scored Liverpool's winner just after Fernandez had been dismissed.
Monk said after the game: "If anything, the Liverpool player's [Coutinho] foot is higher than ours.
"Keith is a good referee, I have watched it about 30 times. Hopefully he will rescind that. He is a sensible guy, he is a good referee."
