The family of jailed Al Jazeera journalist Peter Greste have applied to have him released by presidential decree in Egypt, describing it as their "best option" after a court ordered a retrial for him and two of his colleagues.

Greste, along with colleagues Canadian-Egyptian Mohamed Fahmy and Egyptian Baher Mohamed, has been imprisoned for 370 days, after being falsely accused and then found guilty of aiding the outlawed Muslim Brotherhood.

Greste family urges Egypt to deport Al Jazeera journalist

"Peter's Egyptian lawyer lodged an application with the Egyptian attorney-general's office to have Peter deported," Mike and Andrew Greste, the brothers of Greste, told reporters in Brisbane.

The brothers said on Friday the decision by an appeals court to order a retrial was a "positive step in the legal process and one step closer to justice being served".

But they added that a decree from Egyptian President Abdel Fattah el-Sisi in November allowing him to deport foreigners sentenced to prison or on trial was "the best option to get Peter home".

Speaking to Al Jazeera, Andrew Greste said the family was "seeking application to have Peter brought back to Australia".

Australian Foreign Minister Julie Bishop said Greste could be transferred home under the decree, although it had yet to be tested.

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"The law is not very clear. It is a new law. But it does provide for a couple of options for prisoners to be transferred back to their home country - in this case, Australia," Bishop told the Australian Broadcasting Corporation.

If the deportation application fails, the brothers said Greste's lawyer would apply for bail at the retrial, adding they had been advised that it could start in 45 days.

Fahmy's lawyer, Amal Clooney Mohamed, has also submitted a request asking for her client's deportation to the Egyptian prosecutor. The application was endorsed by the Canadian government.

Greste and Fahmy were sentenced to seven years in prison, while Mohamed received an additional three years for having a spent bullet in his possession, which he had picked up at a protest site.

The three defendants were not at Thursday's hearing in Cairo, which lasted just 30 minutes.

Al Jazeera has called the accusations against its three journalists absurd and repeatedly demanded their release.

The US State Department welcomed the retrial as a recognition that "the original decision was flawed".

"We are following this case closely and continue to urge the Egyptian government to consider all available measures to release these journalists. We believe that all journalists have a right to do their jobs free from intimidation or fear of retribution," it said in a statement.

Source: Al Jazeera and agencies