The ban, extended to 18 months, will expire in April 2018, CAS said.
Norway's Olympic Committee originally banned Johaug for 13 months after she tested positive for clostebol, an anabolic steroid, last September, but the International Skiing Federation (FIS) called for an extension.
Johaug won the gold medal in the 4x5km relay at the Vancouver Olympics in 2010 and also claimed a silver and bronze in Sochi four years later. She won three golds at the 2015 world championships in Sweden.
In its ruling, the CAS said Johaug had used a cream bought by a team doctor in Italy to treat acute sunburn on her lips. The active ingredients listed on the packaging included clostebol acetate.
"Having reviewed the matter in full, the (CAS) Panel noted that Ms Johaug failed to conduct a basic check of the packaging, which not only listed a prohibited substance as an ingredient but also included clear doping cautionary warning," the CAS said in its ruling.
In a televised news conference, a tearful Johaug said she had been unfairly treated, reiterating her position that the drug had only been taken after she asked the doctor about the legality of its content.
"I'm completely broken. I had a dream of competing at the Olympics... I can't understand this punishment," she added.
Despite the setback, the 29-year-old said she now aims to return to competition for the 2018/2019 season, particularly the 2019 world championships in Austria.
"I want to return to the top of the podium," Johaug said.
(Reporting by Terje Solsvik and Nerijus Adomaitis; Editing by Keith Weir and Christian Radnedge)
