A court in Milan ruled to uphold an earlier acquittal, with the presiding judge saying: "The crime does not exist and he did not commit the crime."
Italy's richest man, he was first acquitted in 2004.
A law introduced by his government meant he could not be retried, but it was ruled unconstitutional, giving prosecutors a green light to appeal.
Berlusconi was accused of bribing judges to stop the sale of food group SME to a rival businessman in the 1980s.
Facing a five-year jail term, he called the accusations against him "completely unfounded".
"Berlusconi was very emotional," one of his lawyers, Gaetano Pecorella, said after the court ruling.
"It's a great result. After 11 years of effort Berlusconi has been recognised as completely innocent of all charges," his other lawyer in the case, Nicolo Ghedini, said.
Prosecutors may appeal the decision.
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And there's more "completely founded" material behind it, as it happens:
BERLUSCONI ON TRIAL IN SEPARATE CASES.
Berlusconi is currently on trial in two other corruption cases, both involving British corporate lawyer David Mills, the estranged husband of Britain's Culture Secretary Tessa Jowell.
The first trial, which began in November, centres on alleged fraud at Berlusconi's private TV network company Mediaset.
The case stems from Mediaset's purchase of TV rights for US films up until 1999 through two offshore firms.
Prosecutors believe the purchase costs of US films were artificially inflated for tax evasion purposes.
In the second trial, which began last month, Mills is accused of accepting $600,000 from Berlusconi as payment for not revealing details of Berlusconi's media empire in two trials against the ex-premier in 1997 and 1998.
Berlusconi and Mills deny wrongdoing.
Berlusconi, who is Italy's richest man, has been at the centre of numerous corruption investigations into his vast business empire.
He has never received a definitive guilty verdict but in some cases he has been cleared because of the statute of limitations or changes to the law introduced when his coalition was in power.