Judge Nikos Fakiolas, president of the three-man panel, made the announcement on Tuesday just two minutes into the hearing.
“It could not be substantiated that the charges constitute a criminal offence under Greek law,” he said.
Gusinsky is now a free man, said lawyer Alexandros Lykourezos. Gusinsky, who holds Russian and Israeli nationality, said the decision was “reasonable”.
A fierce critic of Putin, Gusinsky left Moscow in 2000 after being charged with swindling state-dominated gas giant Gazprom out of $250 million (220 million Euros).
Greek police arrested him on a Russian warrant at Athens airport on 21 August as he flew in from Israel for a family holiday.
He was released a week later after paying a 100,000-Euro bond but was barred from leaving the country pending the extradition ruling.
Case to continue
Moscow court authorities said they had not yet been officially informed of the Greek court ruling.
A spokesman for the Russian general prosecutor’s office told the Interfax news agency that Moscow would not drop its criminal case against Gusinsky.
Gusinsky said the court decision
The tycoon has already successfully fought off a Russian extradition request in Spain, where he was briefly held twice.
The Athens court last month gave Russia 15 days to clarify charges Gusinsky faced in Moscow.
Documents provided by Moscow showed that Gazprom had settled its claim against Gusinksy and was no longer pressing charges, said Lykourezos.
The court decision was the second time in a month that European judges have turned down a Russian request to extradite one of its former “oligarchs”, widely despised in Russia for making fortunes through shadowy property privatisation deals in the 1990s.
The rest of the county was struggling with post-Soviet poverty.
A decision to extradite Gusinsky could have put Athens in a diplomatic crossfire. According to senior Greek diplomats, Israel and the United States had been pressing Greece not to extradite Gusinsky, a senior figure in the World Jewish Congress.