Rights campaigners welcomed the three-year reduction of Valentin Danilov's 14-year sentence but said it did not signal the President would halt what they say is the Kremlin's practice of using the judiciary to stifle dissent.
In his 60s, Danilov is expected to be freed in 10 days. He watched yesterday's hearing from his prison in Siberia's Krasnoyarsk region by videolink.
"I think he was quite shocked when he heard the opinion of the prosecutor who - supported the appeal [for early release]," his lawyer Yelena Yevmenova said.
Danilov and other scientists had said the satellite technology data he passed to China more than a decade ago was declassified and the case was politically motivated.
The Kremlin has denied influencing the courts and says it is wrong to describe the treatment of Mr Putin's opponents as a clampdown on dissent.
The hearing had been postponed several times because of ill-health, state-run channel Rossiya said.
Danilov will be freed unless the ruling is challenged but will remain on parole for the rest of his term.