"They will not be released until they appear before the new chamber, which will decide whether to release them or not," said Mostafa Nagy, a defence attorney, on Thursday.
Australian Peter Greste, Egyptian-Canadian Mohamed Fahmy and Egyptian Baher Mohamed of the broadcaster’s English service were detained in December 2013 for spreading false information.
"The Court of Cassation has accepted their appeal and ordered a retrial," Greste's defence lawyer Amr Al-Deeb said after a hearing lasting just 30 minutes.
After the conviction was overruled by the court of cassation today, an Al Jazeera spokesman said:
"Baher, Peter and Mohammed have been unjustly in jail for over a year now. The Egyptian authorities have a simple choice – free these men quickly, or continue to string this out, all the while continuing this injustice and harming the image of their own country in the eyes of the world. They should choose the former."
Defence lawyer Negad Al-Borai told journalists after the hearing that he hoped for a "happy end" to the case.
"The court has the right to release them today," he said.
Defence lawyers said they believed a retrial for the three men would be held within a month.
Greste's brothers Mike and Andrew said they were disappointed with the court's decision.
"We have learned in the past that this is not over until he is out and it looks like we have a long road ahead of us."
Adel Fahmy, Mohammed Fahmy's brother, said he had hoped his brother would have been freed on Thursday. He said each lawyer received three minutes to argue their stance on the case.
"I hoped for more today," he said.
Egyptian authorities offered no immediate comment on the ruling.
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