David Hicks's lawyer says the United States has admitted the former Guantanamo Bay inmate is innocent and his terrorism conviction is invalid.
The Adelaide man was convicted in 2007 of providing material support for terrorism.
But his lawyer, Stephen Kenny, says the military commission hearing Mr Hicks's appeal has been told the U-S government now does not dispute his innocence.
Mr Kenny has told Karen Ashford, he believes it marks a major breakthough for his client.
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