“After hearing the appeal CONMEBOL decided to reduce the sanction … to two games,” South America’s football governing organisation explained in a statement in response to a Chile appeal.
Jara’s ban sees him miss Monday’s semi-final against Peru and the final or third/fourth-place play-off.
The player’s fine was also reduced from $7,500 to $5,000 (£3175).
Jara received his ban for “unsporting behaviour” after appearing to stick his finger up Cavani’s bottom in the quarter-final win over Uruguay last week.
Cavani responded to the provocation a slight touch to the Chilean’s face and Jara fell to the ground, prompting the referee to send the Uruguayan off. Chile scored the only goal of the game soon after.
Jara’s gesture was the main talking point from the match and has been dubbed the ‘Finger of God’ in Chile, an echo of Argentina captain Diego Maradona’s infamous ‘Hand of God’ goal from the 1986 World Cup.
Uruguay had a second player dismissed in the closing stages of the match, prompting a fracas involving most of the players on the pitch, the coaching staff, the match officials and even a touchline cameraman.
CONMEBOL said it would decide after the tournament whether to sanction the Uruguayan players for their part in the incidents.
Paraguay face Argentina in the second semi-final on Tuesday.