Kremlin critic and former oil tycoon Mikhail Khodorkovsky and his business partner have had their prison terms reduced from 13 to 11 years by a Moscow court.
Khodorkovsky and his co-defendant Platon Lebedev were convicted of fraud and multi-million dollar tax evasion in 2003 and again in 2010 for embezzlement and money laundering.
The case was widely criticised abroad as politically motivated, after Khodorkovsky - the founder of Yukos Oil and formerly Russia's richest man - challenged the power of Vladimir Putin early in his presidency.
The Kremlin has denied it was involved in the case.
"As for Mikhail Borisovich [Khodorkovsky], there was no personal persecution ... This is purely an economic crime. The court took its decision," said Vladimir Putin at his annual press conference on Thursday.
The Russian president stated that he had no say in Khodorkovsky's prosecution and bore no grudge against him. He had previously dismissed allegations over involvement in the oil tycoon's case by saying "a thief should sit in jail".
"Who is against that?" asked Putin. "Should he walk the streets?"
Al Jazeera's Robin Forestier-Walker, reporting from Moscow, said that Putin's reference to Khodorkovsky as "Borisovich" - the oil tycoon's patronymic - was a sign of respect.
"Putin denied having anything to do with the decision to lessen the sentence, which is in trend with a relaxing of late in the judicial system towards the kind of financial crime that Khodorkovsky was convicted of," our correspondent said.
"But generally most Russia-watchers think that nothing happens in such high profile cases without a nod from the Kremlin. If one takes the opinion that the judicial system in Russia hasn't much in the way of independence then one can imagine that perhaps Mr Khodorkovsky is now deemed an old adversary who has served his time.
"Even as this news emerges, more contemporary challenges for Mr Putin in the form of opposition leader Alexey Navalny are under pressure. The investigative committee said today it intended to press ahead with charges against Mr Navalny for fraud - ironic given Navalny's popularity for his strident campaigns against state corruption."
Russian laws on economic crimes were changed in 2010, paving the way for the reduction in the pair's sentences. Khodorkovsky, now 49 years old, was one of several tycoons who made huge fortunes following the breakup of the Soviet Union in 1991.
Khodorkovsky’s lawyers have previously appealed to the court, arguing that the convicted pair had already served their sentences in full, as per the new legislation.
A statement released on Khodorkovsky’s website stated that he is to be freed from the jail near the Arctic circle in October 2014, and Lebedev in July 2014.
Putin says the judiciary is independent, but Khodorkovsky’s imprisonment was interpreted by the former KGB spy's opponents as a warning to wealthy tycoons to stay out of politics. It was also seen as the beginning of a Kremlin drive to increase state control over lucrative oil investments.
Yukos Oil was disbanded following Khodorkovsky's jailing, and its assets sold off, mainly to state bodies.