This cleared Dewani of charges he paid hitmen to kill his wife while on honeymoon in Cape Town four years ago.
State prosecutors had argued that Dewani paid 15,000 rand (1,300 US dollars) in a plot with taxi driver Zola Tongo and others to kidnap and murder his wife, Anni, in November 2010, charges he has consistently denied.
Three South Africans, who had implicated Dewani as part of plea bargains for reduced sentences, are serving lengthy jail terms for her murder.
Dewani's defence team asked the court last month to dismiss the case due to a lack of evidence and contradictions from key witnesses.
(READ MORE: Briton denies guilt in S.African "honeymoon murder" trial)
"The application is granted. The accused is found not guilty on this charge," said Judge Jeanette Traverso, having earlier questioned the reliability of the state's witnesses.
A stony-faced Dewani stood up and walked down the courtroom stairs toward the holding cells. He is expected to be released and could fly home to Britain later on Monday.
Dewani's trial is the second high-profile case this year to turn the spotlight on South Africa's judicial system and high murder rate.
(READ MORE: Pistorius not guilty of murder)
A Pretoria high court in October sentenced Olympic and Paralympic runner Oscar Pistorius to five years in jail for shooting dead his girlfriend Reeva Steenkamp.