Father-of-three Bill Shaw, 52, from Leeds, was jailed for two years in March and fined 16,000 after being found guilty of bribing officials.
But he was today acquitted following an appeal in the Afghan capital Kabul.
A Foreign Office spokeswoman said: "We are pleased for Mr Shaw and his family.
"We welcome the appeal court's decision which is now subject to finalisation in the Supreme Court.
"The UK continues to strongly support the work of the Afghan government to counter corruption and reinforce the rule of law in Afghanistan."
Mr Shaw's family have always claimed his original trial was a "sham", insisting the charges against him were "totally misconceived" and "not proven".
During the trial, Mr Shaw said he paid for the release of two vehicles that were impounded.
He explained that he believed he was paying a legitimate fine which was fully documented and approved in accordance with his company's procedures.
He insisted he had not offered a bribe at any time.
Mr Shaw, who has been awarded the MBE, launched his appeal yesterday.