Morsy and his co-accused were sentenced to life in June 2015 after being convicted of conspiring with Palestinian group Hamas, the Iranian Revolutionary Guard and other foreign organizations.
As of now, Morsy has only been convicted of a single 20-year sentence for his role in the torture
of protesters in clashes
outside the presidential palace in 2012. Morsy has exhausted his appeals in this case. He still faces other charges as well.
The overturning of Morsy's life sentence is the latest development in a series of cases involving the one-time leader.
In addition to the overturned life sentence, the same Egyptian court last week tossed out a death sentence
against him for a jailbreak during the chaos of the 2011 Arab Spring protests.
Morsy and the political wing of the Muslim Brotherhood movement were voted into power in 2012 following the uprising but were ousted in a 2013 military coup.
He was tried en masse with Mohamed Badie -- the spiritual leader of the Muslim Brotherhood -- as well as more than 100 alleged members of the outlawed group, according to state media.
Their death sentences were widely criticized as political grandstanding. The Egyptian government banned the Muslim Brotherhood and declared it a terrorist organization after the military seized power.
More charges for Morsy?
In June, Morsy was sentenced to 25 years in prison for leaking state secrets to Qatar and received another 15-year sentence for lesser charges. According to state media, his appeal is scheduled for later this month.
Morsy is set for another hearing next month on charges of insulting the judiciary, state media reported.