Seoul High Court upheld parts of the conviction, but used its discretion to release the executive.
Prosecutors may challenge the decision in the country’s supreme court.
The case gripped the public amid growing anger against the country’s biggest companies, known as chaebols, and their influence on wider society.
In Monday’s hearing, the court halved Lee’s original sentence to two and a half years – and suspended the sentence for charges including bribery and embezzlement, meaning he does not have to serve any more prison time.
Despite his release, Lee plans to appeal against the remaining guilty verdicts, his lawyer said.
BBC report that last year a lower court jailed Lee for corruption in a political scandal that ultimately brought down former President Park Geun-hye.
The Samsung Electronics vice chairman, who is also known as Jay Y Lee, had been convicted of a range of offences including bribery and embezzlement.
The scandal exposed the ties between family-run conglomerates and political powers.
Samsung Electronics is regarded as the jewel in the crown of the Samsung Group conglomerate, which is made up of 60 interlinked companies.
