"The verdict of the previous court has been quashed," lawyer Saleh Nikbakht said. "Her punishment has been changed to a suspended two-year sentence and she will be out of prison in one and half hours."
The ruling comes just a day after a Tehran court heard a closed-door appeal by Saberi, who was initially detained in January reportedly for buying alcohol, an illegal act in the Islamic republic.
Since then she has been detained in Tehran´s notorious Evin prison.
The case triggered deep concern in Washington, which had dismissed the spying charges against the 32-year-old Saberi as baseless, and among human rights groups.
Saberi had been accused of "cooperating with a hostile state," a charge which carries a prison term of one to 10 years.
But Nikbakht said the appeal court had quashed the verdict issued by a Tehran revolutionary court on April 13 on the grounds that the United States and Iran could not be defined as hostile towards each other.
It is not immediately clear if Saberi will be able to leave Iran.
The sentence against Saberi was the harshest ever meted out to a dual national on security charges in Iran.
The former US beauty queen launched a hunger strike on April 21 in protest at her sentence, taking in only water or sugared water, but she ended it after about two weeks after being briefly hospitalized in the prison clinic.
The sentence was handed down just weeks after new US President Barack Obama proposed better ties with Tehran after three decades of severed ties.
Iran, which does not recognize dual nationality, has said Saberi had continued working "illegally" after her press card was revoked in 2006.
Saberi, who is also of Japanese origin, has reported for US National Public Radio, the BBC and Fox News, and has lived in Iran for the past six years.
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