In a statement the ATP found 20-year-old Kyrgios guilty of "aggravated behaviour" and served him with a 28-day ban and $25,000 (21,450 euros) fine.
But both punishments will be waived if Kyrgios avoids any fines for verbal or physical abuse at ATP events over the next six months.
"Once the player has met those conditions the penalties will be formally dismissed," the ATP confirmed.
"If the conditions are not met the penalties will be invoked after any appeals process is exhausted."
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Kyrgios, who was fined $10,000 by the ATP for his courtside sledge at the time, issued a statement apologising for his remarks, insisting they were made "in the heat of the moment".
The ATP's head of rules and competition Gayle David Bradshaw said: "This incident was egregious and reflected poorly on our sport. Nick has expressed regret, and the best result would be that he learns a lesson from this incident and that he understands he is responsible to the Tour and to fellow players for both his actions and his words.
Wawrinka had called on the ATP to take "major action this time" against Kyrgios. Last week accused the Australian of failing to make a proper apology.