U.S. President George W. Bush decided on Monday to spare I. Lewis "Scooter" Libby, former chief of staff to Vice President Dick Cheney, from serving a 30-months jail term.
However, Libby, who was convicted in the CIA leak case, still needs to pay a fine of 250,000 U.S. dollars and to spend two years on probation. His conviction also stands.
Bush made the announcement hours after a federal appeals court ruled that there should be no delay for Libby to report to the prison.
Libby was convicted March 6 of lying to investigators probing the 2003 leak of CIA official Valerie Plame's identity. He was sentenced to 30 months in jail on June 5.
"My decision to commute his prison sentence leaves in place a harsh punishment for Mr. Libby," Bush said in a statement.
"The consequences of his felony conviction on his former life as a lawyer, public servant and private citizen will be long- lasting," according to the statement.
Until now Bush had stayed out of the case, with his aides saying he would let Libby's appeal go forward.
The case arose from a probe into how the identity of Valerie Plame, then a covert CIA agent, was leaked to the media in the summer of 2003.
Libby, 56, had served as Cheney's chief of staff and national security adviser between 2001 and October 2005, when he resigned after being indicted in the case.
The charges against Libby involves statements he made to the FBI and a grand jury during their probe into how the covert identity of CIA agent Plame was leaked.
Libby was the only person charged in the probe. He was not accused of actually leaking classified material.
Some in the United States believe the whole Bush administration was behind the leak and the former chief of staff to Cheney was just a "scapegoat."
Plame's name became public when Robert Novak named her in his New York Times column on July 14, 2003.
Her husband, former ambassador Joseph Wilson, had openly questioned the Bush administration's basis for invading Iraq, which raised the question that if the White House deliberately leaked his wife's identity to embarrass and discredit him.
Former Deputy Secretary of State Richard Armitage has admitted he disclosed the information to a reporter.
Novak pointed to another "senior administration official" -- political adviser Karl Rove to Bush -- as the second source for his column.
Cheney has continued to express support and empathy for his former chief of staff, and Bush's decision to keep Libby out of jail was not unexpected.