Steward faced a hearing late Tuesday after he was sent off by referee Jaco Peyper for a dangerous challenge to the head of Hugo Keenan that ended the Ireland full-back's match in Dublin.
The panel agreed an act of foul play had taken place.
But a statement released Wednesday said there were sufficient mitigating factors "including the late change in the dynamics and positioning of the opposing player which should have resulted in the issue of a yellow card rather than a red card".
"On that basis, the committee did not uphold the red card and the player is free to play again immediately," the statement added.
Ireland led 10-6 when Steward left the field shortly before half-time and went on to win 29-16 as they clinched a Grand Slam.
England did well to stay in the contest for as long as they did following the dismissal of the Leicester player, with captain Owen Farrell uttering an astonished "Red card?!" when Peyper sent the 22-year-old off the field.
But the committee's statement gave some support to the South African referee by noting "match officials are required to make decisions under pressure and in the heat of a live match environment".
England ended the Championship with two wins and three losses for the third straight season in what was their first Six Nations since Steve Borthwick replaced Eddie Jones as head coach.