Cannavaro's club Juventus has said the test failure was the result of cortisone used to treat a bee sting.
"The case was blown out of proportion, but it's over now," Lippi said Friday. "I haven't heard from Fabio but there was no need to. It all calmed down in two hours. Will he be with us Sunday? Yes, certainly."
Cannavaro, who helped Italy win the World Cup in Germany three years ago, was already suspended for the country's qualifier with Ireland on Saturday due to yellow cards. But he was due to join the team Sunday to begin training for Wednesday's game against Cyprus.
CONI anti-doping prosecutor Ettore Torri held a hearing with Cannavaro and Juventus medical director Bartolomeo Goitre in Turin late on Thursday, only hours after the positive test was made public.
Torri is still due to make a ruling on the case.
Cortisone can be administered if authorization for therapeutic needs is granted beforehand, and it was unclear if Juventus received advance permission from CONI.
Italian media speculated that Cannavaro will be cleared, while Juventus and Goitre could be sanctioned.
"The worries lasted three seconds, the time needed to read the news. It's upsetting that some people think there's something else under all this," said Giorgio Chiellini, Cannavaro's partner in central defense with Juventus and Italy.
"Fabio is very clean and it would be a mistake to mount a case when there is none. I was there when Fabio was bitten by a bee during training. His arm swelled right away and it created some worry."
Cannavaro received a cortisone injection on Aug. 29 to prevent an allergic reaction. He apparently tested positive a day later after Juventus' game with AS Roma, although CONI has not provided details.
Cannavaro then joined Italy's team for World Cup qualifiers with Georgia and Bulgaria, and the national squad's staff said it was informed of the injection.
National team physician Enrico Castellacci said the case was purely "bureaucratic."
"For us there was never a case," Castellacci said, according to the Gazzetta dello Sport. "(Juventus) told us everything that happened and said that without that cortisone medicine he would have had an (allergic) reaction. We asked Juventus for the medical certificate and all the necessary documents for drugs taken by Cannavaro, and we are in possession of all the correspondence regarding the case."