Chen Man was handed a suspended death sentence for killing a man on China's southern island province Hainan in November 1994.
But the high court of China's eastern Zhejiang province, where he was originally convicted, pronounced Chen not guilty due to "lack of evidence", it said on a social media account today.
The case is the latest to highlight miscarriages of justice in China, where forced confessions are widespread and more than 99 percent of criminal defendants are found guilty.
Chen -- who is in his early 50s -- was convicted solely on the basis of confessions which were "inconsistent" during two trials which convicted him, court judge Zhang Qin said in a statement today.
China's courts are tightly controlled by the ruling Communist party, which has vowed to overturn mistaken verdicts in the face of widespread public anger.
Of those exonerated in recent years, Chen spent the longest time in prison, state media said. For others, the new verdicts have come too late.
A court in the Inner Mongolia region in 2014 cleared a man named Hugjiltu, who was convicted, sentenced and executed for rape and murder in 1996 at the age of 18.
Twenty-seven officials in China have been "penalised" for his wrongful execution, state news agency Xinhua reported late Sunday.
But only one person will face criminal prosecution, it added, with 26 others facing lighter "administrative penalties".
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