The FA's independent regulatory commission upheld Watford's claim of wrongful dismissal on Monday.
Holebas, 34, has been an integral part of Javi Gracia's side this season, making 28 league appearances and three in the FA Cup.
Watford will be hoping to ruin Manchester City's chances of completing a domestic treble when they meet at Wembley on Saturday.
(Reporting by Hardik Vyas and Rohith Nair in Bengaluru; Editing by Ed Osmond)
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