He has been in custody since the Dec. 14 outburst, which occurred as Bush was holding a joint news conference with Prime Minister Nouri al-Maliki.
He was initially sentenced to three years after pleading not guilty to assaulting a foreign leader, then the court reduced it to one year because the journalist had no prior criminal history.
Defense attorney Karim al-Shujairi said al-Zeidi will now be released on Sept. 14, three months early.
"We have been informed officially about the court decision," al-Shujairi told The Associated Press in a telephone interview. "His release will be a victory for the free and honorable Iraqi media."
Judicial spokesman Abdul-Sattar Bayrkdar said he had no immediate information about the release because it was a weekend.
The bizarre act of defiance transformed the obscure reporter from a minor TV station into a national hero to many Iraqis fed up with the nearly six-year U.S. presence here.
The case also drew worldwide attention and became a rallying cry throughout the Muslim world for critics who resent the U.S. invasion and occupation.
Thousands demonstrated for al-Zeidi's release and hailed his gesture, which came in the waning days of the Bush administration. The incident also embarrassed al-Maliki, who was standing next to Bush at the time.
Neither leader was injured, but Bush was forced to duck for cover as the journalist shouted in Arabic: "This is your farewell kiss, you dog! This is from the widows, the orphans and those who were killed in Iraq."