It wasn't immediately clear whether the stunning decision from the 7th U.S. Circuit Court of Appeals in Chicago means the 58-year-old, currently Inmate No. 40892-424 in a Colorado prison, will serve less than his original 14-year sentence.
The two-term governor proclaimed his innocence for years on talk shows, on NBC's "The Apprentice" reality show and while impersonating Elvis - his idol - at a block party. Taking the stand at his decisive retrial in 2011, a sometimes-tearful Blagojevich said he was a flawed man but no criminal.
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His appeal echoed a familiar refrain in public and in court: Blagojevich had merely engaged in legal, run-of-the-mill political horse-trading that pols everywhere engage in.
Jurors eventually convicted him of 18 counts; 11 dealt with charges that he tried to swap an appointment to the seat for campaign cash or a job, once musing about becoming ambassador to India.
Blagojevich was also convicted on other play-to-pay schemes. They include the attempted shakedown of the Children's Memorial Hospital in Chicago for a contribution to Blagojevich's campaign.
At a 2011 sentencing, Judge James Zagel scolded Blagojevich, saying, "When it is the governor who goes bad, the fabric of Illinois is torn and disfigured." The 14-year term was one of the longest for corruption in a state where four of the last seven governors have gone to prison.
The jaw-dropping allegations that a sitting governor tried to sell a Senate seat made headlines after agents arrested Blagojevich at home on Dec. 9, 2008 - weeks after Illinois' native son Obama won the presidential race.
The well-coiffed Blagojevich quickly became the butt of jokes on late-night TV, including for his foul-mouthed rants on FBI wiretaps that were released after his arrest.
Blagojevich began serving his sentence at a prison near Denver on March 15, 2012. Prior to the appeal, the estimated release date for the father of two school-aged daughters was 2024; he'd be 67.