The court also reduced fines on Chen and his wife, Wu Shu-jien, from $15.5 million to $11.4 million, the Central News Agency reported.
The two were originally sentenced to life imprisonment in September 2009 by a district court after being found guilty in four corruption cases, including misuse of special state funds and taking bribes in a land deal, the report said.
Chen had said the bribes were actually political donations. He also maintained the charges were politically motivated because his party had favored Taiwan's independence from China, which has always asserted its sovereign claims on the island nation.
The current Taiwanese president, Ma Ying-jeou, and his party favor closer trade and other ties with the Communist country.