De Sousa was poised to become the first US official to face jail time for the practice known as extraordinary rendition, which occurred during President George W. Bush's war on terror.
She was one of nearly two dozen Americans -- most thought to work for the CIA -- who were sentenced to five years in prison in 2009 by an Italian court for their role in seizing the suspected terrorist in Italy in 2003. They were convicted in absentia.
Portuguese authorities arrested De Sousa in February, and she was expected to arrive Wednesday in Italy to serve her sentence.
The pardon reduces her sentence to three years, a punishment that could be served by "alternative measures to imprisonment" -- meaning community service, according to a statement Tuesday by the Italian President's office.
A European Union directive allows for the alternative sentence to be completed in Portugal, where De Sousa is currently being held. One of her attorneys is expected to file the alternative measures request Wednesday in an Italian court.
Convicted in absentia
A career diplomat, De Sousa was among 26 Americans convicted in the kidnapping of radical Egyptian cleric
Osama Moustafa Hassan Nasr, also known as Abu Omar.
He was seized in Milan in 2003, transferred to Egypt and tortured, he said. He was suspected of recruiting men to fight in Iraq and Afghanistan and was under heavy surveillance by Italy's intelligence agency.
Prosecutors said he was nabbed by a CIA team working with Italian intelligence officials.
War on terror practice
The operation was one of the so-called extraordinary renditions ordered by the Bush administration in which suspects were captured and taken to other countries for interrogation. Initiated after the September 11, 2011, attacks, the practice was ended by the Obama administration.
The 2009 trial was the first to address the practice. Human rights groups accused the United States of often sending suspects to countries that practiced torture.
Washington acknowledged making secret "rendition" transfers of terrorism suspects between countries but denied using torture or handing suspects over to countries that did.
At the time of the trial, De Sousa, said she was "saddened, angered and dismayed" by the ruling, her lawyer told CNN.
She felt the US government had "stabbed her in the back," Mark Zaid said then.
"We understand why the Italians did what they did. They were following their laws. But at the end of the day, representatives of our United States government abroad were let down and left alone by their own government."