Egypt's Court of Cassation or appellate court also accepted the appeals of all other defendants in the case -- Mubarak's top six aides and former interior minister Habeeb al Adly.
Last June, Mubarak and al Adly were sentenced to a life in prison after being convicted for being responsible for the deaths of an estimated 800 protesters.
Six high-ranking security officials were acquitted in the same case, sparking nationwide outrage. The opponents of Mubarak had also termed his life sentence a lighter punishment.
"The court has ruled to accept the appeal filed by the defendants... And orders a retrial," Judge Ahmed Ali Abdel Rahman said reading out the ruling during the brief hearing today.
The ruling sparked cries of cheers from the supporters of the 84-year-old former president who ruled for nearly three decades before being overthrown in a mass uprising.
No date has been set for the retrial.
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Yesterday, Mubarak was remanded for 15 days over gifts worth hundreds of thousands of US dollars he and other regime officials allegedly received from a leading newspaper.
Mubarak is alleged to have appropriated 6 million Egyptian pounds in public funds, according to a report in Al Ahram newspaper.