Redshift - How to remove NOT NULL constraint?

There is no way to change column on Redshift.

I can suggest you to create new column, copy values from old to new column and drop old column.

ALTER TABLE Table1 ADD COLUMN new_column (___correct_column_definition___);
UPDATE Table1 SET new_column = column;
ALTER TABLE Table1 DROP COLUMN column;
ALTER TABLE Table1 RENAME COLUMN new_column TO column;

The accepted answer can produce an error:

cannot drop table <table_name> column <column_name> because other objects depend on it

Adding CASCADE at the end of the DROP COLUMN statement will fix this, however it can have the unwanted side effect of dropping other tables if they are dependent on it.

ALTER TABLE table1 ADD COLUMN newcolumn (definition as per your reqirements);
UPDATE table1 SET newcolumn = oldcolumn;
ALTER TABLE table1 DROP COLUMN oldcolumn CASCADE;
ALTER TABLE schema_name.table1 RENAME COLUMN newcolumn TO oldcolumn;

I found this information here, when the accepted answer wasn't working for me: https://forums.aws.amazon.com/message.jspa?messageID=463248

Also note: When I tried to rename the column, I got another error: relation does not exist

To fix that, I added the schema name in front of the table name in the RENAME COLUMN statement

You cannot alter the table.

There is an alternative approach. You can create a new column with NULL constraint. Copy the values from your old column to this new column and then drop the old column.

Something like this:

ALTER TABLE table1 ADD COLUMN somecolumn (definition as per your reqm);
UPDATE table1 SET somecolumn = oldcolumn;
ALTER TABLE table1 DROP COLUMN oldcolumn;
ALTER TABLE table1 RENAME COLUMN somecolumn TO oldcolumn;