A Kiwi grandmother who says drug traffickers hid $5 million ($5.4 million) worth of heroin in her bags without her knowledge has won a reduction in her sentence.

On Thursday, the Court of Criminal Appeal unanimously ordered Deliah Gidget Hudson be released after serving 3 ½ years of her new eight-year jail term.

The decision means Hudson will be able to reunite with her family in Auckland in March 2019.
Hudson, who appeared in court by video link, appeared relieved as the decision was handed down.

In October last year, the 51-year-old was jailed for nine years with a 50-month non-parole period.

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Jurors in her trial were told she had moved from Auckland to Cambodia to work with underprivileged children as a teacher and counsellor.

On a trip home, via Singapore and Adelaide, Customs officers located two packages, containing 1.729kg of pure heroin, sewn into her hand luggage.

Hudson denied she was a drug courier, questioning how anyone could have smuggled $5 million worth of heroin past authorities in Cambodia and Singapore.

Jurors found her guilty on the basis she had sewing skills and had no accommodation booked in New Zealand - despite her intention to stay with her family.

Hudson appealed against her sentence, saying penalty was "manifestly excessive" given her good background and lack of prior offending.

On Thursday, Justices Kevin Nicholson, Greg Parker and David Lovell granted Hudson's appeal and reduced her head sentence to eight years.

They further ordered that, upon her release, she abide by the conditions of a two-year, $500 good behaviour bond.