Brazil's Supreme Court of Justice (STJ) unanimously decided on Tuesday to reduce ex-President Luiz Inacio Lula da Silva's prison sentence from 12 years and 1 month to 8 years and 10 months.
While the judges reaffirmed Lula's guilt for corruption and money laundering, the judges said the original sentence was "exaggerated."
The new decision now opens the door to a possibility that Lula would be able to leave the prison in Curitiba by September and finish serving the remaining sentence under house arrest.
The Brazilian law allows a prisoner to be placed under house arrest once the prisoner has completed a sixth of his or her prison term.
Even though it agreed to a reduced jail term, the STJ rejected a petition by Lula's defense team, which argued that there were procedural illegalities against the former president.
The STJ also decided to reduce the fine Lula was sentenced to pay, from 29 million reals (7.4 million U.S. dollars) to 2.4 million reals (612,000 U.S. dollars).
Lula can still make an appeal to the Supreme Court.
Lula's defense team has maintained his innocence and insists that the former head of state is a victim of political persecution.