Former president will be given a new trial. Five other leaders of now-banned Muslim Brotherhood also had their death sentences quashed.
Security sources believe the killing of Brig. Gen. Adel Rajaei outside his home in a suburb of the Cairo may be revenge for his military role.
The sentence has been handed down for charges of killing protesters during demonstrations in 2012.
Mohamed Kamal, head of group's 'armed wing,' and Yasser Shehata, another leader, fatally shot in a raid on a Cairo apartment used by the leaders as headquarters.
Court's decision is related to the storming of a police station after the Egyptian military forcefully cleared two Brotherhood protest camps, killing hundreds.
Charges include passing state secrets to Qatar during the ousted president's rule.
Rachid Ghannouchi, leader of country's leading Islamic party, talks of a 'Muslim democracy' instead of theocracy, and shows that Arab Spring need not necessarily bring extremist movements to power.
The agreements between Hamas and Egypt also give Egyptian President al-Sissi the ability to influence the rules of the game between Hamas and Israel.
The Islamic Action Front demands a government apology following the accidental raid of the headquarters after it was ‘mixed-up’ with that of an outlawed group.
The authorities gave no reason for the clampdown on the group, which has strong ties with Hamas, says senior Brotherhood member.