The court in the southern city of Aix-en-Provence declared on Thursday that it could not order the extradition of Pierre Tegera, citing a ruling by a higher court in February that a case could not be judged on the basis of laws passed after the alleged offences were committed.
"That does not mean that the court is convinced that you were not implicated in the crimes you are accused of," Judge Nicole Besset told Tegara.
Rwanda's genocide laws were passed between 1996 and 2004.
A campaign group has accused Tegara, 62, who is now an ambulance driver in the Riviera city of Nice, of taking part in massacres of Tutsi in Kilibira, in the north of the country, during the 1990s and of giving "significant support" to the interahamwe militias who spearheaded the genocide.
He is accused of killing 349 people and was named in an international report on rights violations published in 1993.
He was arrested in Nice in July 2013 on the basis of an international arrest warrant issued by Rwanda.
He lost his political asylum status in 2008.