Other two prominent IPL players - Ajit Chandila and Ankeet Chavan - who were on bail were also discharged in the case in which six persons including underworld don Dawood Ibrahim and his aide Chhota Shakeel were declared proclaimed offenders.
"All are discharged (from the case)," Additional Sessions Judge Neena Bansal Krishna said while pronouncing the order.
The case was today put for order on framing of charges against the 36 accused persons who were on bail.
Sreesanth, 32, broke down on hearing the order while the other accused including the players present in the courtroom started hugging each other.
Talking to PTI, Sreesanth said at last justice has been done to him, adding, "God willing, I will be able to return to cricket. I have no regrets, no complaints."
The court had on May 23 reserved for today the order on framing of charges in the case.
Special Cell of Delhi Police had named 42 accused in the case in its charge sheet out of whom six are absconding.
Police had told the court that properties of Dawood and Shakeel in Mumbai have already been attached in connection with the 1993 Mumbai serial blasts case and that they have not visited India since 1993.
Police had informed the court that Dawood had properties in his name at Dongri in Mumbai whereas Shakeel owned properties in Nagpada there.
The court had earlier issued non-bailable warrants against Dawood and Shakeel, Pakistan-based Javed Chutani, Salman alias Master and Ehteysham, who all are considered to
be Dawood's associates.
The police had filed a 6,000-page charge sheet against various accused in the case. It had also filed supplementary charge sheet later on.
The court had granted bail to Sreesanth, Chavan and other accused for lack of evidence against them under the provisions of stringent Maharashtra Control of Organised Crime Act (MCOCA).
Other accused, including Chandila, were also granted bail later on by the court.
The police, in its charge sheet, had claimed that Dawood and Shakeel, who have been "controlling the fixing and betting market" in cricket in India, were behind IPL spot-fixing.
'Very emotional day'
"It is a very emotional today, I thank my family and well wishers for this day," Sreesanth told "ABP News" TV channel after the verdict.
"I will make sure am fully fit. I will bowl those out-swingers again," he told reporters.
"No regrets, no complains against anybody, god-willing I will return to cricket. Hopefully I can take permission from BCCI to use their facilities again and regain fitness," the Kerala speedster told "NDTV".
"I had faith in God and also their was support from my family," said Chandila while thanking the judiciary system.
"It is a very happy moment for me and my family. I am looking forward to come back and play," Chavan said.