Ralf Spies, 52, was cleared of 12 counts of attempted murder with a "racist" motive and a charge of causing an explosion in the attack in the western city of Duesseldorf on July 27, 2000.
The regional court in the city found him not guilty, after having released him from custody in May "for lack of sufficiently reliable witness testimony".
All the victims were on their way back from a German language course when the explosive, hung in a plastic bag on a fence near the Wehrhahn station entrance, went off, sparking panic.
Ten eastern European migrants -- six of them Jews from the former Soviet Union -- were injured in the bombing.
A 26-year-old Ukrainian pregnant woman lost her unborn child and had to undergo emergency surgery after the blast ripped off one of her feet.
Her 28-year-old husband suffered wounds over his entire body from metal fragments unleashed in the explosion and was in a critical condition for several days.
Alleged UK neo-Nazi admits buying 19-inch machete to kill lawmaker
Several of the victims are still in therapy to cope with their trauma, chief prosecutor Ralf Herrenbrueck said at the start of the trial.
The prosecution had called for a life sentence.
Spies was known to police as a rightwing extremist at the time and ran a military surplus store near the scene of the crime, which shocked Germany and drew international condemnation.
Investigators say the former soldier has a swastika and a well-known Nazi fortress tattooed on his body.
German neo-Nazi murderer sentenced to life in prison
His trial began under tight security in January, when Spies told the court he had not carried out the bombing and didn't know who had.
"I was definitely not at the scene of the crime at the time it happened," he said.
Duesseldorf police had even questioned Spies for several hours and placed him under surveillance soon after the bombing before determining they did not have enough evidence to arrest him.
The investigation, long dormant, was only revived in 2011, after a series of 10 murders by a band of neo-Nazis.
Known as the NSU, short for National Socialist Underground, the cell consisted of a trio of far-right militants who shot dead eight men with Turkish roots, a Greek migrant and a German policewoman between 2000 and 2007.
Austria recalls embassy employee from Israel over Nazi shirt
While no link was established between the NSU's killings and the Duesseldorf bombing, they spurred investigators to take the extremist threat more seriously.
The NSU's sole surviving member, Beate Zschaepe, was sentenced to life in prison earlier this month by a court in Munich.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ