Sarkozy, 71, is challenging a September ruling by a Paris court that found him guilty of "criminal conspiracy".
He was sentenced to five years in prison for his alleged part in a scheme to obtain funds from the government of late Libyan leader Muammar Gaddafi in exchange for political and diplomatic favours.
The verdict marked the first time that a former president of modern France had been sentenced to actual prison time.
Sarkozy - who led France from 2007 to 2012 - began serving his sentence before a Paris appeals court ordered his release under judicial supervision pending the new trial.
The appeal hearing, which is scheduled to last until June 3, will re-examine all of the evidence and testimony related to Sarkozy and nine co-defendants - including three former ministers.
In September, the judges found that Sarkozy and his associates had formed a criminal association between 2005 and 2007 to secure money from Libya to support his successful presidential bid.
Sarkozy has denied wrongdoing and suggested the accusations were politically motivated.
He has faced multiple legal cases since leaving office but remains an influential figure in conservative politics.
In November, the Court of Cassation - France's top court - upheld his conviction for illegal campaign financing of his 2012 re-election bid, requiring him to spend six months under house arrest wearing an electronic ankle tag, a sentence that has yet to be implemented.
