The 29-year-old was dismissed after just 12 minutes in Wellington when he collided with an airborne Beauden Barrett as the All Blacks flyhalf jumped to catch a high ball, the home side going on to exploit the man advantage to seal the series.
Barrett suffered a concussion in the incident, played no further part in the match and has since been sent home to recuperate.
"Whilst it is unfortunate that NZ #10 sustained a concussion after landing on his head, was removed from the match and is unlikely to be available for the third test match, we did not consider that the player's actions, in the circumstances of this case, were deliberate or reckless," the committee said in a statement.
"Having regard to the totality of the evidence, the Judicial Committee was satisfied, on the balance of probabilities, that the referee's decision to issue the red card was wrong.
"Accordingly, the red card is dismissed and the player is free to resume playing rugby immediately. We direct World Rugby to expunge the Ordering Off (red card) from the player's disciplinary record."
After checking the incident with television match official George Ayoub, Australian referee Angus Gardner said he had "no choice" but to issue the red card even though it looked a dubious decision to many.
"It is important to record, that no criticism is made of the referee nor, in our opinion, would any be warranted," the committee added.
"Unlike the referee, we had the benefit of all the video footage, which showed various angles of the incident. Unlike the referee, we had the luxury of time to deliberate and consider, in private, the incident."
The All Blacks will be eyeing a 3-0 whitewash in Dunedin on Saturday.
(Reporting by Amlan Chakraborty in New Delhi; Editing by John O'Brien)
