Yusef Nadarkhani was sentenced to death for apostasy last December after being arrested whilst trying to register a house church in his home town of Rasht in 2009.
His lawyer, Mohammad Ali Dadkhah, told Agence France-Presse on Sunday that the sentence had been overturned by the supreme court.
“The supreme court has annulled the death sentence and sent the case back to the court in Rasht, asking the accused to repent,” he said.
The AFP report comes just days after the supreme court reportedly upheld the death sentence for Nadarkhani.
Apostasy sentences are overturned where defendants repent for converting away from Islam. It is not clear whether Pastor Nadarkhani will repent.
The pastor, who belongs to the Church of Iran, is currently being held in Lakan prison.
In addition, Dadkhah told AFP that he had been sentenced to nine years in jail by a court in Tehran on Sunday and that he was facing a 10-year ban on practising law or teaching at university for “actions and propaganda against the Islamic regime”.
He said he had 20 days to lodge an appeal against the ruling.