Pastor Youcef Nadarkhani has refused to recant his faith in Jesus Christ in appeals hearings, despite being told that the death sentence would be overturned if he did so.
The sudden turn-around by the Supreme Court reflects doubts surrounding the conduct of the initial investigation in the case. The court has now sent Nadarkhani's case back to the lower courts to be looked at again.
Iranian student news agency ISNA has released a statement saying: "If there is an appeal and the case is returned to the Supreme Court, the case will be reviewed."
Nadarkhani was arrested in October 2009 and has been held in Lakan Prison, Rasht, since being found guilty of apostasy in September 2010. He was sentenced to death, despite there being no such crime under Iran's penal code.
Iranian state media has recently contradicted earlier reports by saying that Nadarkhani was charged and found guilty of rape, extortion and had committed crimes that posed a security threat in the country.
Worldwide attention has been given to the case, with various global leaders speaking out.
In Britain, former Bishop of Rochester Michael Nazir-Ali asked President Ahmadinejad for his "urgent intervention" to save Pastor Nadarkhani.
"It appears that the court (that) sentenced Pastor Nadarkhani has chosen to impose a sentence which is beyond what is codified in the Iran Penal Code and contravenes both the International Covenant on Civil and Political Rights, and article 23 of the Iranian constitution," he said.
"Although the court has justified these actions, we ask you to appeal to the Iranian government to have compassion on Pastor Nadarkhani and grant him clemency," Nazir-Ali continued. "Iran has a long tradition of justice and of compassion and we appeal to the Iranian authorities to uphold this tradition in Pastor Nadarkhani's case."
Additionally, Paulo Paim, a Brazilian senator, last week sent a petition of a motion in support of the Iranian pastor to the president of the Brazilian Senate, José Sarney.
"Under the Rules of the House, I require a motion in support of the Iranian pastor Nadarkhani Youcef," he says in the claim.
Most recent reports indicated that Iran's Supreme Court took the unusual step of asking Ayatollah Ali Khamenei, Iran's highest religious and political leader, for his input into the case.
Jordan Sekulow, executive director of the American Center for Law and Justice, told Fox News: "Based on these reports, Pastor Youcef is alive and we have reached the highest level of Iranian government. I don't believe this would've ever reached the level of Khamenei without the media attention and outpouring of support we've seen."
At least 39 members of Congress have now signed a letter demanding that US Secretary of State Hillary Clinton push for the Iranian pastor's freedom.