In November, another court had dropped murder charges against the 86-year-old former leader over the deaths of protesters during the 2011 uprising that ended his three decades of autocratic rule.
A lower court had handed down the jail sentence against Mubarak in May last year after convicting him of embezzling about $14 million earmarked for the maintenance of presidential palaces.
It had also handed down four-year jail sentences against the toppled leader's sons, Alaa and Gamal.
The Court of Cassation did not specify whether Mubarak was a free man following its judgement.
But his lawyer Farid al-Deeb told AFP that his client ought to go free as he "has already served" three years in prison.
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.....but does that make him innocent ?