The court found Aya Hejazi, her husband and six others not guilty, an AFP correspondent said.
Hejazi, who co-founded a charity which helps Cairo street children, was arrested in May 2014.
Human Rights Watch last month alleged that Hejazi and her co-defendants had been denied private meetings with lawyers and were being held in "arbitrary detention".
The trial "has been nothing less than a travesty of justice," HRW deputy Middle East and North Africa Joe Stork said at the time.
The prosecution alleged that children were sexually abused at the offices of the Belady Foundation, which Hejazi co-founded with her husband in 2013.
The defence argued that evidence may have been tampered with and several prosecution witnesses later recanted their testimonies.
Hejazi's lawyer told reporters after Sunday's verdict that all the defendants would be freed in the coming days.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)