The court in the central city of Minya had initially sentenced 683 people to death, but on Saturday it commuted death sentences of four defendants to life in prison, including two women, and acquitted 496 others, prosecutor Abdel Rahim Abdel Malik told AFP.
Since the army ousted president Mohamed Morsi in July last year, hundreds of his supporters and Badie himself have been sentenced to death in trials roundly criticised by human rights watchdogs.
The 183 militants sentenced on Saturday were accused of involvement in the murder and attempted murder of policemen in Minya province on August 14, the day police killed hundreds of Morsi supporters during clashes in Cairo.
Lawyers said most of those sentenced to death were still on the run.
The court's decision on Saturday came after it referred its initial ruling in April to Egypt's top Islamic scholar, as required under the country's legal system.
In March, the same court presided by judge Said Youssef Sabry reduced 492 of 529 death sentences to life in prison.
Outside the court on Saturday, families of defendants appeared confused as they tried to understand the details of the verdict, as masked policemen stood guard.
"Allah revealed the truth. Allah acquitted my brother," a man whose brother was one of those acquitted by the court told AFP.
The mass trial comes amid an intense crackdown on Morsi's supporters that has seen more than 1,400 people killed in street clashes with police since his ouster, while over 5,000 have been jailed.
The crackdown has extended to secular leaning dissidents also who supported Morsi's overthrow but turned on the military installed regime that ruled before ex-army chief Abdel Fattah al-Sisi was elected president last month.
Badie, the Brotherhood's spiritual guide, was this week handed a death sentence by another court that accused him and 13 others of inciting violence that killed 10 people near al Istiqama's mosque in the Giza neighbourhood of Cairo after Morsi's ouster.
The initial death sentences by the court in Minya had triggered an international outcry, although the authorities defended them by insisting they had been issued only after "careful" consideration and saying were subject to appeal.
"To date, the post Morsi's government's record of bringing stability is a poor one in terms of human rights," said Geoffrey Mock, an expert on Egypt at the New York-based Amnesty International.
"In short, Sisi appears to be repeating the old abuses of the Mubarak era."
Sisi, the former field marshal, won last month's presidential election riding on a wave of popularity after he led the ouster of Morsi.
Rights activists, however, fear that under his presidency Egypt could see autocracy worse than under Mubarak.
Sisi has boldly signalled that he intends to return Egypt to stability rather than encouraging democratic freedoms.
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Pakistan should learn from this