The six-member jury reached the decision Friday in favour of Hogan after deliberating for six hours following a two-week civil trial in Florida.
Hogan, 62, has argued that the video, in which he is seen having sex with the wife of a friend, invaded his privacy and humiliated him.
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Hogan, now retired, was one of America's most famous entertainment wrestlers. Known for wearing a bandana and a handlebar moustache, his real name is Terry Bollea.
The sex tape lasts one minute and 41 seconds.
During the trial, Hogan testified that a friend of his, radio personality Bubba "the Love Sponge" Clem, had an "open marriage" and wanted his wife to have sex with Hogan.
After several entreaties, Hogan said he finally agreed, not realising that the encounter was secretly recorded.
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