State prosecutors can now decide to reinstate the charges, which Zuma has always denied.
He is tipped to become the country's next president in upcoming elections.
The 16 charges of corruption, money-laundering and racketeering stem from a controversial $5bn 1999 arms deal.
Despite the Bloemfontein appeal court ruling on Monday, Zuma will remain the ANC's contender to run the country after the forthcoming general election, according to the BBC.
Zuma, 65, has persistently denied charges of graft, money-laundering and racketeering, stemming from a controversial $5bn 1999 arms deal. He has said he would only resign from public office if convicted.
In September 2008, charges of corruption, fraud, racketeering and money laundering against Zuma were dismissed on technical grounds.
Judge Chris Nicholson in his ruling said there may have been political interference in the prosecution of Zuma. That led Thabo Mbeki, former South African president to step down. Kgalema Motlanthe, an ally of the ANC leader, replaced him.
Jacob Zuma has said he would only resign from public office if convicted.