Silvio Berlusconi was convicted in 2013 in what became known as the “bunga bunga” case or Rubygate, but won an appeal in 2014.
Italy’s highest court has now rejected prosecutors’ appeals to overturn the acquittal and hold a fresh trial.
The three-time Italian leader remains embroiled in several legal battles.
Silvio Berlusconi and the 17-year-old dancer involved, Karima El-Mahroug, known as “Ruby the Heartstealer”, denied having had s**.
The judges at the Court of Cassation took more than nine hours to reach their decision, and will issue a written ruling detailing their reasoning with the next 90 days.
The verdict leaves Silvio Berlusconi free to rally his Forza Italia party as it struggles to maintain a leading role in Italian politics, analysts say.
He remains under investigation for allegedly paying off witnesses in the “bunga bunga” case, and is on trial in Naples for alleged political corruption.
Last week Silvio Berlusconi completed a community service sentence for tax fraud, at a care home.
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