"It's a landmark case," said lawyer Ahmad Jailani Abdul Ghani, who represented Siti Fatimah Tan Abdullah, 38, in her two-year court battle to convert back to Buddhism from Islam.
Siti Fatimah, an ethnic Chinese woman formerly known as Tan Ean Huang, had converted to Islam in 1998 in order to marry her Muslim lover at the time. In Malaysia, non-Muslims must convert to Islam before they can legally marry a Muslim.
But Siti Fatimah later broke up with her husband and in 2006 sought to have her conversion to Islam annulled, Ahmad Jailani said, adding that she had never practiced as a Muslim and had only adopted Islam in name to ensure her marriage was recognized.
The lawyer said the ruling was important because it accepted that Muslims could renounce Islam on the grounds that they had never really practised the faith.
"We brought in two witnesses from her family to say that (because of) the way she prays and way she lives in her house, she is not a Muslim," Ahmad Jailani said.
Islam is Malaysia's official religion, but a big minority of around 40 percent of Malaysians profess other faiths such as Buddhism, Hinduism, and Christianity.
Islamic affairs are governed at state level, so Thursday's ruling by the Penang Sharia High Court does not necessarily form a precedent for sharia courts in Malaysia's 12 other states. Ahmad Jailani said the Penang state religious council, which had opposed Siti's renunciation of Islam, had signalled it was likely to appeal the ruling.