The unanimous ruling from the 7th U.S. Circuit Court of Appeals in Chicago means the 58-year-old ex-governor, currently Inmate No. 40892-424 in a Colorado prison, could end up serving less than his original 14-year sentence. He has served more than three years behind bars so far.
Blagojevich wanted a Cabinet job in exchange for appointing Obama friend Valerie Jarrett to Obama's vacant Senate seat. After Blagojevich's arrest, the seat went to Roland Burris, who served less than two years before Republican Mark Kirk was elected in the heavily Democratic state.
In its ruling, the appeals courts pointed to how President Dwight Eisenhower named Earl Warren to the US Supreme Court allegedly after Warren offered Eisenhower key political support during the 1952 campaign.
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Blagojevich, who is of Serbian descent, 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.
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.
After his arrest on Dec 9, 2008, Blagojevich became the butt of jokes on late-night TV, including for his well-coiffed hair and his foul-mouthed rants on FBI wiretaps.