The Croatian was handed the suspension by the International Tennis Federation's Anti-Doping Tribunal last month after testing positive for a banned stimulant at the BMW Open in Munich in May.
Both Cilic and the ITF appealed the decision to the Court of Arbitration for Sport, with the player arguing he should not have had to serve a suspension and should only have received a warning.
The ITF argued the period of suspension should be increased.
A hearing was held in London on October 16 and CAS announced its decision on Friday.
The arbitration panel partially upheld Cilic's appeal, agreeing the length of the ban was too severe, although they felt a suspension was the right sanction.
A CAS statement said: "The panel determined that the degree of fault committed by the athlete was inferior to that established in the IADT (ITF Anti-Doping Tribunal) decision.
"The panel also determined that the sanction imposed was too severe in view of the degree of fault and concluded that it should be reduced to four months, commencing on 23 September 2013, less the period of provisional suspension already served by the player from 26 June 2013 to 23 September 2013. The player's ban will therefore end at midnight on 25 October 2013."
The ban had initially been due to run until the start of February 2014, meaning Cilic would have missed the Australian Open, but he is now free to play in next week's Paris Masters.
The 25-year-old's explanation for the presence of the stimulant nikethamide, which is banned in competition, in his system was that he had inadvertently taken it in Coramine glucose tablets that had been purchased for him from a pharmacy.
The ITF tribunal accepted he had not intended to enhance his performance but only reduced his suspension from the usual two years to nine months.
Cilic accepted a provisional suspension on June 26 and pulled out of Wimbledon, citing a knee injury.
Initially his ban was backdated to May 1, the day he provided the sample, and his results subsequent to that date, including a final appearance at Queen's Club, were disqualified.
He no longer has to forfeit the ranking points and prize money for those events, although his results from the BMW Open remain disqualified.
During his ban, Cilic has dropped from 12th in the world rankings to 47th.
Serbian Viktor Troicki, who was banned for 18 months after missing a blood test in Monte Carlo in April, is still waiting for the decision on his appeal.
CAS is expected to give its verdict ahead of the Davis Cup final between Serbia and the Czech Republic, which begins on November 15.
In a carefully-worded statement, ITF president Francesco Ricci Bitti said: "The ITF respects the decision of the CAS tribunal, who agreed that an Anti-Doping Rule Violation has been committed.
"We await the full decision to better understand CAS's reasoning for reducing the sanction."
Cilic's first match back will be against a qualifier in the first round in Paris, with the winner to play fourth seed Juan Martin del Potro.