Everton were docked points with immediate effect in November after being found to have breached profitability and sustainability rules (PSR) relating to losses.
The club will now move onto 25 points, which lifts them into 15th place from 17th and five points above the relegation zone.
"An independent appeal board has concluded that the sanction for Everton FC's breach of the Premier League's profitability and sustainability rules (PSRs), for the period ending season 2021/22, will be an immediate six-point deduction," a Premier League statement read.
"Everton FC appealed the sanction imposed against it on nine grounds, each of which related to the sanction rather than the fact of the breach, which the club admitted.
"Two of those nine grounds were upheld by the appeal board, which has substituted the original points deduction of 10 for six.
"This revised sanction has immediate effect and the Premier League table will be updated today to reflect this."
The original points deduction meant Everton dropped from 14th in the standings into the relegation zone with four points. The club filed an appeal against the initial deduction, which they labelled "wholly disproportionate and unjust".
In a statement today, Everton claimed they were "satisfied" with the board's decision to reduce the sanction posed against them.
"While the club is still digesting the Appeal Board's decision, we are satisfied our appeal has resulted in a reduction in the points sanction," it read.
"The club is also particularly pleased with the Appeal Board's decision to overturn the original Commission's finding that the club failed to act in utmost good faith. That decision, along with reducing the points deduction, was an incredibly important point of principle for the Club on appeal. The Club, therefore, feels vindicated in pursuing its appeal."
Everton admitted to a breach of PSR for the period ending with the 2021/22 season, with their total losses for that period amounting to 124.5 million pounds according to an independent commission.
According to the Premier League's Financial Fair Play regulations, clubs are permitted to lose a maximum of 105 million pounds ($133.33 million) over a three-year period.
The Merseyside club recorded four straight wins after their deduction to climb up to 16th, but have been dragged back into the relegation battle following a run of nine league games without a victory.
The club say they are still considering the wider implications of the decision and will make no further comment at this time.
Everton were then charged once again by the Premier League in January for a separate PSR breach, along with Nottingham Forest.
Both clubs were referred to the chair of the Judicial Panel, the Premier League said, who will appoint an independent commission to determine the appropriate sanction, which may include a further deduction for the Sean Dyche-led club.
A second points penalty would increase risk of relegation and add to the uncertainty over the future of Everton, who are currently in the midst of protracted takeover talks with US investment fund 777 Partners and also hoping to move to a new stadium ahead of the 2025-26 season.
BACKGROUND ON OTHER CLUBS
Last year, Manchester City were referred to an independent commission over more than 100 alleged breaches of finance rules since the club were acquired by the Abu Dhabi-based City Football Group in 2008.
No verdict has been reached in that case. Premier League CEO Richard Masters said last month that a date had been set for a hearing. City have denied any wrongdoing.
Clubs in England's top flight have been docked points before.
Middlesbrough had three points deducted in 1997 when they failed to fulfil a fixture, while Portsmouth received a nine-point penalty in 2010 when the financially troubled club entered administration.
