Villepin, who has set up his own party, made it clear that he will stand in 2012’s presidential election by declaring that he is ready to serve the French people after the latest judgement in the long-runnning Clearstream case.
The public prosecutor had called for Villepin, a bitter Sarkozy rival, to be given a 15-month suspended sentence but the Paris appeal court rejected the accusations.
The case centred on a fake list of names that falsely implicated Sarkozy in kickbacks on arms deals with Taiwan.
The trial focussed on claims and counter-claims about who in European defence company EADS, which owns Airbus, was responsible for the fake list, and whether Villepin could have prevented it.
Villepin, best-remembered for leading opposition to the Iraq war at the UN in 2003, was cleared of all charges last year.
But public prosecutors appealed, although Sarkozy did not take part in the appeal.
Two co-accused, former deputy boss of aerospace giant EADS Jean-Louis Gergorin and former EADS employee and mathematician Imad Lahoud, were jailed for six and 18 months respectively and fined 40,000 euros.