General Pinochet can now be put on trial for responsibility in two murders by the "Caravan of Death," a band of soldiers who conducted dozens of extrajudicial killings in the months after the 1973 coup that brought him to power.
The immunity he enjoyed as a former president already had been lifted on four previous occasions, which included an investigation of the 1975 "Operation Colombo" in which 119 leftists disappeared and are thought to have been killed.
The Santiago appeals court upheld a ruling by a judge who said General Pinochet could be released on bail pending trial in the "Operation Colombo" case.
But his lawyer said the 90-year-old former strongman will not go free immediately as he cannot pay the US$19,230 bond since most of his funds have been frozen in an investigation of secret bank accounts in which he allegedly accumulated US$27 million.
General Pinochet has been under house arrest since November 23.
He had already been prosecuted for dozens of "Caravan of Death" murders but the Supreme Court dropped that case in 2002, arguing that mild dementia hindered his ability to defend himself.
But on Wednesday, the appeals court voted 17 to six to approve a request to remove General Pinochet's immunity and allow him to be tried for the killings of Wagner Salinas and Francisco Lara, two political prisoners detained in Curico on September 11, 1973, the day of the military coup.
Both were taken to Santiago and were shot dead on October 5, according to Hugo Gutierrez, an attorney for the men's families.
At least 3,000 opponents of the military government are thought to have been killed during the 1973-1990 dictatorship, and many more were jailed and tortured.