Abu Qatada was found not guilty of conspiring to attack tourists in Jordan during millennium celebrations and granted "immediate release", a judicial source told AFP.
The source said the court found there was insufficient evidence to convict Abu Qatada, who had pleaded not guilty.
Abu Qatada broke into tears in court following the verdict, while members of his family applauded and shouted Allahu Akbar (God is Greater).
His lawyer, Hussein Mubadeen, called the verdict "a success for Jordanian justice".
"It is right that the due process of law has taken place in Jordan. The UK courts agreed that Abu Qatada posed a threat to national security in the UK, so we are pleased that we were able to remove him," a ministry spokesman said.
"Abu Qatada remains subject to a deportation order and a United Nations travel ban. He is not coming back to the UK."
Abu Qatada -- once described as the right-hand man in Europe of late Al-Qaeda founder Osama bin Laden -- was deported from Britain to Jordan in July 2013 after a 10-year legal fight.
In the first retrial in June he was acquitted of plotting a 1999 attack on the American school in Amman.
Born Omar Mahmud Mohammed Otman in Bethlehem in 1960 in the now Israeli-occupied West Bank, Abu Qatada is a Jordanian national because the town was part of Jordan when he was born.
The burly and bearded father of five was one of the most prominent of a set of extremist preachers based in London in the 1990s and 2000s.
Abu Qatada arrived in Britain in September 1993 with his family on a forged United Arab Emirates passport and claimed asylum on the basis that he had been tortured in Jordan.
He gained refugee status the following year but his fiery oratory soon brought him to the government's attention, as he advocated the killing of Jews and praised attacks on Americans.
