Critics say the media law is an attempt to muzzle the press
Zimbabwe's Supreme Court has ruled that parts of the tough new media law are unconstitutional and invalid.
Two journalists had appealed after being charged with publishing falsehoods.
Chief Justice Godfrey Chidyausiku declared that the provisions of the law related to falsehoods were "struck down and... of no force and effect."
In London, the UK minister for international development, Clare Short, has said she believes that President Robert Mugabe will soon be forced out of power.
"My instinct is the end is coming... The forces are mounting," she told the House of Commons.
Australian Prime Minister John Howard has said Zimbabwe will not be readmitted to the Commonwealth until "democracy is restored".
Licence to print
The journalists were charged over a story run by the privately-owned Daily News, claiming that an opposition activist had been beheaded by supporters of the ruling Zanu-PF party.
The story later proved to be false.
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Their lawyers argued that a "falsehood" could include an April Fool's hoax or information from a credible news source, which later proved to be untrue.
The Access to Information and Protection of Privacy Act was signed into law shortly after President Robert Mugabe's controversial re-election last year.
At least a dozen journalists have been charged under the law, which government critics say was an attempt to muzzle the press.
Other provisions stop journalists from working without a licence from the information ministry and bar foreigners from being based in Zimbabwe as journalists.
These provisions are also being challenged.
Information Minister Jonathan Moyo had said earlier this year that the government was considering changing the law.
Speaking in Britain after meeting Prime Minister Tony Blair, Mr Howard reiterated his strong stance on Zimbabwe.
"Until a serious attempt at returning to democratic rule is made there can be no question of Zimbabwe... being readmitted to the councils of the Commonwealth," he said.
"There are no grounds as far as we can see for saying that there has been any significant progress at all, indeed if anything the situation has got worse," said Mr Blair.
"That means we have got to keep up maximum international pressure on the regime."
Earlier this year, the South African and Nigerian presidents had urged the Commonwealth to lift its suspension on Zimbabwe arguing that political violence had subsided.
But Mr Howard, the third member of the troika of Commonwealth leaders opposed this.