Wilson was awarded $4.5 million in damages last September, after a jury found Bauer Media had defamed her in a series of magazine articles that said she had lied about her age, real name and childhood.
Rebel Wilson's huge defamation payout has been slashed after the claim was taken to the appeals court.
Rebel, 38, had claimed the substantial sum in damages as she said the articles had cost her earnings in movie roles she allegedly lost, and for the damage to her reputation.
Actress Rebel Wilson struts across the stage as she is introduced to speak at College Signing Day, an event honoring Philadelphia students for their pursuit of a college education or career in the military at Temple University in Philadelphia, May 2, 2018.
It also cut the Aus$650,000 compensation figure for non-economic loss to Aus$600,000.
In court past year, she successfully argued that eight articles published by Bauer magazines in 2015 had portrayed her as a serial liar, and that this resulted in her being sacked from two feature films.More news: We Happy Few launches in August | PC
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"For a considerable number of reasons, the critical inferences drawn by the judge could not be upheld", the summary of judgment said.
Taking to Twitter before the judgement was delivered, Wilson said the appeal was about Bauer Media "quibbling about how much they now have to pay me".
"It followed that the judge's award of damages for economic loss had to be set aside, there was no basis in the evidence for making any award of damages for economic loss".
It had been the largest defamation payout in Australian legal history, according to the Herald.
"While this case was never about the money for me, I do hope to receive as much as possible to give away to charities and to support the Australian film industry", Wilson added.
"This case was never about the money for me". Several media organisations questioned whether the decision set a new precedent for defamation payments.