It was the first such ruling since the Constitutional Court, which evaluates the validity of French laws, determined in July that people could not be prosecuted for so-called "crimes of solidarity".
Cedric Herrou, an olive farmer in southern France who has made a point of helping migrants crossing the border from Italy, was given a four-month suspended sentence in August 2017.
He had faced a possible maximum sentence of five years in prison and a fine of up to 30,000 euros ($35,000) for helping about 150 migrants trying to enter France.
He was also convicted for sheltering some 50 Eritreans in a disused railway building.
Another activist, Pierre-Alain Mannoni, was given a two-month suspended sentence later that year.
But the Constitutional Court later said such measures went against the basic French "principle of fraternity", as enshrined in the country's motto "Liberty, Egality, Fraternity."
On Wednesday, the Cour de Cassation, France's court of final appeal, sent the case back to the Lyon appeals' court, which is expected to void the case.
"It's a great victory," said Patrice Spinosi, the lawyer for Herrou, citing the "humanitarian exception" for offering legitimate aide to migrants without seeking any personal gain.
President Emmanuel Macron's government enacted in August a tough new immigration law that speeds up the asylum process but also accelerates deportations.
Critics say the law unfairly tries to limit new arrivals.
But the government agreed to drop penalties for anyone providing struggling newcomers with food and accommodation as well as medical, linguistic, legal or social assistance.
The ruling comes as tensions run high among European countries over how to handle the influx of migrants fleeing war and misery in Africa, the Middle East and South Asia.
France received a record 100,000 asylum applications last year, though the overall numbers entering Europe have fallen sharply from their peak in 2015.
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