Western Cape High Court Deputy Judge Jeanette Traverso threw out the high-profile case against 34-year-old Dewani even before he started his defence against the accusation that he plotted to kill his 28-year-old wife Anni Hindocha.
Traverso said the prosecution's case against Dewani was weak and that she can see no reasonable prospect that she might find him guilty once she has also heard his defence.
The evidence presented by the prosecution fell "far below the threshold" of what a reasonable court could convict on, the judge ruled in a case that has grabbed international headlines.
She said the evidence of the prosecution's main witness, taxi driver Zola Tongo, was "riddled with contradictions" and "highly debatable".
Dewani was accused of hiring three men -- taxi driver Tongo, Mziwamadoda Qwabe and Xolile Mngeni -- to kill Anni on their honeymoon in South Africa in 2010. Anni was kidnapped and then murdered in Gugulethu township near Cape Town on November 13, 2010.
Mngeni was sentenced to life in prison for the murder but died in jail. Qwabe was sentenced to 25 years. Tongo was sentenced to 18 years following a plea bargain deal.
Dewani lost a four-year legal battle in the UK to avoid extradition to South Africa, and was sent in April this year to stand trial. Dewani is expected to return home to Britain soon.
Dewani's lawyers applied for his discharge at the end of the prosecution's case, arguing that the evidence against him was so weak he should be acquitted.
Announcing her ruling, Traverso said: "The accused is found not guilty of this charge."
Traverso said his application for discharging him is granted and he is found not guilty on five charges.
She said the only reason not to grant the application would be in the hope that Dewani would implicate himself if he gave evidence.    

But to do so would be a "manifest misdirection", the judge said.
Dewani walked out of the dock and down the stairs to the holding cell without any expression on his face. His family burst into tears and embraced each other after the verdict.
A clearly disappointed Hindocha family left the court immediately.
In a statement read outside the Western Cape High Court, the Hindocha family said: "We feel really, really sad because we have not heard the full story. Shrien lived a double life."

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