Ramush Haradinaj, a rebel commander during the war, was accused of overseeing a campaign of torture and murder against Serbs and suspected collaborators.
But four years after the last acquittal the UN court ruled again that the prosecution had not proved the case.
Serbian officials reacted angrily, denouncing the UN tribunal.
President Tomislav Nikolic said in a statement that the International Criminal Tribunal for the former Yugoslavia was formed “to try the Serbian people”.
He said the verdict would increase euro-skepticism in Serbia.
Ramush Haradinaj’s 2008 acquittal was overturned and a retrial ordered after appeal judges ruled that there had been witness intimidation.
But the ICTY’s trial chamber once again cleared Ramush Haradinaj and co-defendants Idriz Balaj and Lahi Brahimaj of all charges.
The indictment alleged the three men had been involved in a joint criminal enterprise to establish Kosovo Liberation Army control in western Kosovo through detention camps.
Ethnic Serbs, Roma and Albanians who were deemed to have collaborated with Serbs were allegedly tortured and killed.
Judge Bakone Moloto said the evidence established that Serbs and their suspected supporters were beaten at a KLA compound in Kosovo, and at least one of them died of his injuries.
However, he said there was no evidence Ramush Haradinaj or his co-defendants were involved in the attacks or a conspiracy to mistreat civilians.
Ramush Haradinaj, who is the most senior ethnic Albanian indicted by the ICTY, has many supporters among the Kosovo Albanian community.
He served as prime minister for 100 days before he stepped down in early 2005 to deal with his first trial.
Crowds in the capital Pristina watched the latest verdict on a giant screen, and celebrated his acquittal by letting off fireworks and cheering.
Ramush Haradinaj’s lawyer, Ben Emmerson, said his client now wants to restart his political career.
“With the consent of the people, he will soon be resuming his rightful position as the political leader of the country,” Ben Emmerson told reporters at the court.
His face is splashed across vast billboards in Kosovo, accompanied by slogans like “the leader who keeps his word” and “forward with a clean slate”.
However, he is still considered a war criminal in Belgrade, and an arrest warrant has been issued against him by Serbia’s war crimes prosecutor.
Kosovo unilaterally declared independence from Serbia in 2008, but Belgrade has enlisted the support of ally Russia to block any move for international recognition.
Many Serbs feel there has been little accountability for crimes committed against them during the wars of the 1990s.
Quincy Jones, the celebrated musician and producer who worked with Michael Jackson, Frank Sinatra, Ray…
Misleading allegations, rumours and outright lies about voting and fraud are flooding online spaces in…
At least 158 people have died in Spain's worst flooding disaster in generations. On October…
Google has been fined two undecillion (a two followed by 36 zeroes) roubles by a…
Embarking on a home remodel is an exciting journey, promising enhanced comfort, increased property value,…
The US presidential candidates continued to campaign across key swing states on October 20. Footage…