He killed his girlfriend Reeva Steenkamp in February 2013 after shooting her four times through a locked toilet door.
He is currently under house arrest after spending one year of his original five-year sentence in jail.
Pistorius will now have to return to court to be re-sentenced, for murder.
It was earlier incorrectly reported that the court had ruled the manslaughter verdict would remain.
South Africa's Supreme Court of Appeal ruled that the lower court did not correctly apply the rule of dolus eventualis - whether Pistorius knew that a death would be a likely result of his actions.
Reading the ruling reached by a panel of judges, Justice Lorimer Leach said that having armed himself with a high-calibre weapon, Pistorius must have foreseen that whoever was behind the door might die.
Pistorius' lawyer argued that he believed that there was an intruder in the house but the judge said that the identity of the person behind the door was irrelevant.
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