An Egyptian appeals court on Thursday ordered a retrial of property tycoon and politician Hesham Talaat Moustafa, who was sentenced to hang for paying a gunman $2 million to murder a Lebanese singer.

Moustafa, a member of Egypt's ruling party and former chairman of the Talaat Moustafa Group, was convicted in a lower court of paying Egyptian security man Muhsen el-Sukkari to kill Suzanne Tamim, 30, in Dubai.

The court 'accepts the request for retrial for both convicts,' judge Adel Abdel-Hamid told the court, prompting some present in the packed chamber to cheer and ululate.

The judge said the case of Moustafa and Sukkari would go to a criminal court for the retrial.

A statement issued after the ruling said the original verdict had 'mistakes in implementing the law' and said the original court failed to respond to several core requests of the defence.

Witnesses said those in the court included employees of the real estate company and members of Sukkari's family.

'Thank God that Egypt has fair judges and fair trials. We are going to Muhsen now. We are on our way,' Sukkari's father told reporters after the ruling.

Media reports labelled the attack an act of revenge after Tamim, killed in 2008, ended a relationship with Moustafa, 50, a member of parliament's upper house.

The original verdict, sentencing Moustafa and Sukkari to death last year, was greeted with shock in Egypt where members of the elite are generally regarded as being above the law and where reporting of the case had been restricted.

If this appeal had failed, Moustafa and Sukkari would have faced the gallows unless pardoned by Egypt's president.

Moustafa handed over the chairmanship of property firm Talaat Moustafa Group to his brother Tarek after he was charged, but the share price has moved on each twist and turn in the case, that has been watched closely across the Arab world.

The shares had risen as much as 4 percent after the ruling, but later pared gains to trade up 0.9 per cent by 1040 GMT. The benchmark index was up 0.5 per cent. – Reuters