To understand event structures of documents, event causality identification (ECI) emerges as a crucial task, aiming to discern causal relationships among event mentions. The latest approach for ECI has introduced advanced deep learning models where transformer-based encoding models, complemented by enriching components, are typically leveraged to learn effective event context representations for causality prediction. As such, an important step for ECI models is to transform the event context representations into causal label representations to perform logits score computation for training and inference purposes. Within this framework, event context representations might encapsulate numerous complicated and noisy structures due to the potential long context between the input events while causal label representations are intended to capture pure information about the causal relations to facilitate score estimation. Nonetheless, a notable drawback of existing ECI models stems from their reliance on simple feed-forward networks to handle the complex context-to-label representation transformation process, which might require drastic changes in the representations to hinder the learning process. To overcome this issue, our work introduces a novel method for ECI where, instead abrupt transformations, event context representations are gradually updated to achieve effective label representations. This process will be done incrementally to allow filtering of irrelevant structures at varying levels of granularity for causal relations. To realize this, we present a diffusion model to learn gradual representation transition processes between context and causal labels. It operates through a forward pass for causal label representation noising and a reverse pass for reconstructing label representations from random noise. Our experiments on different datasets across multiple languages demonstrate the advantages of the diffusion model with state-of-the-art performance for ECI.