Egypt court overturns Hamas terror blacklisting
One of them told AFP news agency the ruling in February was quashed because the lower court was not "competent" to make such verdicts.
Hamas, which controls the Gaza Strip, welcomed Saturday's ruling.
Hamas is an offshoot of Egypt's Muslim Brotherhood - itself designated as a terrorist organisation in 2013.
Egypt's Muslim Brotherhood President Mohammed Morsi was ousted in 2013.
Positive impact
Hamas said the appeals ruling was "correcting a previous mistake".
Hamas spokesman Sami Abu Zuhri told news agency: "The decision today represents a commitment by Cairo to its strong role towards the Palestinian cause.
"There is no doubt that [it] will have positive results and impacts on the relation between Hamas and Cairo."
In February, a lower court designated Hamas a a terrorist organisation, accusing it of supporting an insurgency in Egypt's northern Sinai.
The verdict came after two complaints were reportedly filed against the militant group implicating it in attacks against the police and army in the peninsula.
Militants have killed scores of policemen and soldiers since President Morsi's removal, vowing revenge for government moves against his supporters that have resulted in more than 1,400 people being killed.
Egypt has traditionally played a key role in mediating between Israel and Hamas in Gaza, and is seen as a key player in any peace or security talks.
Hamas dominates Gaza and fought a 50-day war with Israel last year. Under its charter, the movement is committed to Israel's destruction.
Israel, the United States and several other nations have designated Hamas a terrorist organisation over its long record of attacks and refusal to renounce violence.
Hamas, which was founded in 1987, won Palestinian parliamentary elections in 2006 and reinforced its power in Gaza the following year after ousting its Fatah rivals.
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