Many Egyptians have complained that Mubarak's trial was deeply flawed, marred by political loyalties within the court and an inept prosecution. Some activists hailed the retrial order as a small victory.
"The court's ruling is a resuscitation of the revolution," said Mohamed Adel, a leader of the 6th of April youth movement and one of the key organizers of the 2011 protests that led to Mubarak's fall.
Egypt's first democratically elected president, Mohammed Morsi, called on the attorney general's office in November to open new investigations and trials for Mubarak, Adly, and other former regime officials whose sentencing - and for some, acquittals - drew public anger for being too light.
Activists and legal experts said retrials present an important opportunity to examine broader evidence that they say was neglected during last year's trial by a prosecution that was headed by a Mubarak appointee.
An Egyptian fact-finding mission ordered by Morsi concluded this month that Mubarak had watched the uprising unfold on a live TV feed from his palace.
But others complained that a retrial could open the door to even lighter sentences for Mubarak and his cronies.
"This is an attempt to escape punishment because the general prosecution did not spend enough effort examining evidence," said Ahmed Ezzat, a lawyer with the Association for Freedom of Thought and Expression, an Egyptian legal nongovernmental organization. "It means the criminal court's verdict against Mubarak and Adly was deficient," he said.
The state news agency MENA reported that when the verdict was announced, "a state of joy" spread among Mubarak supporters who had gathered in the court's lobby for Sunday's proceedings.
Judge Ahmed Ali Abdel-Rahman also overturned convictions against Mubarak, his sons, and a close associate, Hussein Salem, on corruption charges.
Sunday's ruling came one day after a prosecutor placed a new detention order on Mubarak over gifts he and other regime officials allegedly received from Egypt's top newspaper, Al-Ahram, as a show of loyalty while he was in power.
Mubarak, 84, was moved to a military hospital last month after slipping inside a prison bathroom and injuring himself.
This article contains information from the Associated Press.
