Anojan Sivarasa, 27, was sentenced to death in September after a Saudi appellate court convicted him of blasphemy against Islam and the Prophet Muhammad over his comment.
BBC - Saudi Arabia's Supreme Court has set aside the death sentence handed to a Sri Lankan migrant worker over a comment he made on Facebook, Colombo's Deputy Foreign Minister Arun Hemachandra said.
Anojan Sivarasa, 27, was sentenced to death in September after a Saudi appellate court convicted him of blasphemy against Islam and the Prophet Muhammad over his comment.
The case sent shockwaves through Sri Lanka, spurring diplomatic efforts to seek clemency.
Saudi Arabia's top court set aside the sentence on Wednesday, Hemachandra said in a post on Facebook, where he thanked the authorities and legal teams of both nations for their efforts.
In late June, footage of a young Muslim man kicking a dog following Hindu pilgrims circulated widely on social media, triggering religious arguments online.
During the exchange, a user posted derogatory remarks about a Hindu deity, leading Sivarasa to respond in Tamil insulting the Prophet Muhammad.
Although Sivarasa promptly deleted the comment and posted an apology video, a screenshot of it was brought to the attention of his employer and Saudi officials, leading to his arrest in July.
It is not clear if there will be further legal proceedings or whether Sivarasa will remain in detention, and for how long. He was initially sentenced to five years in prison as well as a fine of three million Saudi riyals ($0.8m; £0.6m) by the Al-Ahsa Criminal Court.
Faizer Mustafa, a Sri Lankan lawmaker who is involved in legal negotiations with Saudi Arabia regarding Sivarasa's case, confirmed to BBC Sinhala that Saudi Arabia had overturned the death sentence, adding that they are reviewing the Supreme Court's latest ruling.
Sivarasa's family had earlier said they have had no direct contact with him since 28 September.
International rights groups had also joined calls for Saudi to spare his life.
"Saudi authorities should end their use of abusive laws to hand out extraordinary sentences for speech-related offenses, especially against migrant workers who are already in a vulnerable position with limited protections," Joey Shea, senior Saudi Arabia researcher at Human Rights Watch, said on Tuesday.