"I have decided to withdraw my appeal in the Court of Arbitration of Sport," he said in a statement.
"Ultimately, I accept that it was my error of judgment that has placed me in this position.
"I cannot stress enough that I did not and would never have attempted to cheat in sport through any means.
"Unfortunately I, like many other young Australians, fell to the off-field temptation of a so-called 'party drug'."
Sailor promised that in the meantime he would commit himself to teaching young athletes about the pitfalls and risks that come with the consumption of prohibited substances.
Australia's Sports Anti-Doping Authority (ASADA) confirmed they would be accepting the offer from Sailor, a former international for both union and league.
"The case is a strong reminder to all athletes of the serious consequences under the World Anti-Doping Agency Code for those caught using cocaine," authority chairman Richard Ings explained.
"By warning other athletes about the dangers of drug use, he can play an important role in protecting the integrity of Australian sport."
Since making his Wallabies debut in 2003, Sailor has been guilty of a few off-field indiscretions. He found himself embroiled in a nightclub incident in South Africa in 2005 and as a result was handed a two-game suspended ban.
Sailor was involved in another nightclub incident in South Africa in February this year and was fined and suspended by the NSW Waratahs.
However, the ARU intervened and added an extra two matches on to the original suspension for bringing the game into disrepute.
Sailor remains adamant that he will return to competitive rugby when his two-year suspension ends, with a return to league being touted as a possible option.