The court ruling means that Morsi no longer faces the threat of execution, although he is serving three lengthy jail sentences.
Egypt's appeals court has overturned a death sentence handed down against former President Mohamed Morsi and ordered a retrial.
The ruling by the Court of Cassation on Tuesday means that Morsi, who was sentenced to death in June 2015 for allegedly taking part in a mass jailbreak during a 2011 uprising, is no longer under threat of execution, although he is serving three lengthy jail sentences.
Abdel-Moneim Abdel-Maksoud, the Muslim Brotherhood's lawyer, said the court had applied the law correctly.
"The ruling was expected because (Morsi's conviction) was legally flawed, and we are waiting for the retrial."
Egypt's first freely elected civilian president, Morsi came to power after the 2011 uprising that toppled longtime president Hosni Mubarak.
He was overthrown in mid-2013 by general Abdel Fattah al-Sisi following mass protests against his rule, and immediately arrested. Sisi came into power shortly after.
Since toppling Morsi, Sisi has clamped down on dissent. Mass trials have been held for thousands of Muslim Brotherhood supporters, and hundreds have received death sentences or lengthy prison terms.
Morsi is already serving a 20-year prison sentence for a conviction arising from the killings of protesters during demonstrations in 2012.
He has also been sentenced to 40 years on charges of spying for Qatar and to life imprisonment on charges of spying for the Palestinian group Hamas.
Since 2013 Morsi's Muslim Brotherhood movement has been blacklisted and subjected to a crackdown that has killed hundreds of his supporters and jailed thousands.
The government deems the Brotherhood, Egypt's oldest opposition movement dating back decades, a terrorist group. The Brotherhood says it is committed to peaceful activism.
Activists and rights groups at home and abroad have said many or all the mass trials have been legally flawed.
The Egyptian government says the judiciary is independent and that it never intervenes in its work.