Former Interior Minister Habib al-Adli was also granted a retrial.
"The court has ruled to accept the appeal filed by the defendants, and orders a retrial," Judge Ahmed Ali Abdel Rahman was quoted as saying by Reuters.
Mubarak and al-Adli were sentenced to life in prison June 2 by a court that held them responsible for the deaths of protesters killed by security forces trying to quell the uprising.
Mohamed Abdel Razek, one of Mubarak's lawyers, told Reuters the retrial would be based on the same evidence used in the previous trial.
Mubarak, 84, is currently being treated in a military hospital after he hurt his head in a fall in his prison bathroom in December. He has suffered a range of illnesses since his ouster in February 2011.
Both Mubarak and al-Adli are likely to remain in prison because of separate investigations into their affairs, the BBC has reported.
The court ruling was met with joyous cries from his supporters who were reported shouting outside the courtroom, “We love you, president!”