China spares Tibetan monk
China accused him of being a terrorist, and found him guilty of bomb attacks in south-west China.
His new sentence came as a rights group said another monk, Tashi Phuntsog, had been "broken" in a Chinese jail.
Tenzin Deleg Rinpoche and his aide, Lobsang Dhondup, were found guilty of carrying out bomb attacks in Ganzi, near Tibet's eastern border, and Sichuan province's capital, Chengdu.
Human rights groups overseas and United Nations human rights experts have said that Tenzin Deleg Rinpoche did not receive a fair trial, and was mistreated in detention.
His sentence has now been commuted to life in prison because he has not violated the law during the past two years, China's state Xinhua news agency said.
Activists overseas say he was targeted by the authorities because his efforts to preserve Tibetan identity made him an obstacle to Chinese control over the region.
The man described as Tenzin Deleg Rinpoche's "right-hand man", Tashi Phuntsog, was released earlier this month.
The Chinese authorities have never said what Tashi Phuntsog was sentenced for, or why he was released early.
But Human Rights Watch said Tashi Phuntsog needed immediate medical attention after being "physically broken".
The group called on China to explain the monk's deterioration in custody, and said he could no longer walk or speak clearly.
"Tashi Phuntsog entered prison as a healthy man in his early 40s, and he was cast out literally as a broken man," it said.
Tashi Phuntsog was detained in 2002, 10 days after Tenzin Deleg Rinpoche.
The area where the bomb attacks Tenzin Deleg Rinpoche is accused of took place has a large ethnic Tibetan population and a history of independence activity.
China, which invaded and occupied Tibet in 1950, has been regularly
criticised for its treatment of Tibetans and any separatist ambitions.