Appeal judges said Sgt Nightingale's sentence would be cut from 18 months to 12 months and suspended.
They said he could be released immediately.
Sgt Nightingale's wife Sally, 38, wept at the verdict.
She was lost for words but nodded when asked if she was "thrilled".
Lawyers for an SAS sniper from Cheshire are to challenge whether it's in the public interest to continue with a retrial.
Cheshire SAS sniper Sergeant Danny Nightingale, who was released from jail last week after winning a court appeal, has returned to work.
Released Cheshire SAS Sniper Danny Nightingale speaks exclusively about his release to ITV's Daybreak