The woman, identified by local media as a mother of five, was convicted by a local judge on a remote island in the Maldives, a popular tourist destination that has seen a rise in extremism.
Seven-year-old sexually assaulted, stoned to death in Gujranwala
The Haveeru news site said the woman had confessed to the crime after giving birth on the remote equatorial islet of Gemanafushi, about 400 kilometres (250 miles) south of the capital Male.
The Supreme Court annulled the case on Sunday night, ruling that the judge had failed to consider the legal as well as Islamic procedures of the nation of 340,000 Sunni Muslims, the Maldives Independent website said.
The Maldives, a popular Indian Ocean honeymoon destination, observes elements of Islamic Sharia law as well as English common law.
Sex outside marriage is against the law in the Maldives, although the ban does not apply to tourists visiting the upmarket holiday destination.
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The sentence was unusually harsh even for the Maldives, which has frequently sentenced those convicted of extramarital sex to public flogging.
However, the country is not known to have carried out the death penalty.
The UN Human Rights Council has repeatedly asked the Indian Ocean atoll nation to end the practice of flogging women convicted of sex outside marriage.
In 2013, the government intervened to overturn the conviction of a 15-year-old rape victim sentenced to 100 lashes for pre-marital sex after an international outcry.
The girl had been repeatedly raped by her own father, who was later charged along with her 29-year-old lover, who was given 10 years in jail.
The sentence of death by stoning is the latest blow to the international reputation of the atoll nation, which has been in the grip of political unrest since the toppling of its first democratically elected leader, Mohamed Nasheed.
The former president was jailed for 13 years in March after being convicted under the country's terrorism laws for ordering the arrest of an allegedly corrupt judge in 2012.
The UN has said his rushed trial earlier this year was seriously flawed and a UN panel has ordered his immediate release along with compensation, but the government of President Abdulla Yameen has refused to comply.
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