South African officials denied the allegation.
Prosecutors had accused the suspects of hatching a plot to kidnap Teodoro Obiang Nguema Mbasogo, the president of Equatorial Guinea, and then replace his government with one led by an exiled oppostion leader.
Alwyn Griebenow, men's lawyer said: "Everybody was aquitted. [The magistrate ruled that] on the evidence available to prosecutors ... They should never have been charged."
Most of the suspected mercenaries were released from a Zimbabwean prison in 2005 after spending a year there.
A leading member of the alleged coup plot, Simon Mann, a British citizen, is still serving a four-year jail term there.
Upon their return to South Africa the men were charged with contravening the military assistance act.
The court found irregularities in the way the manner was handled, saying the men should never have been imprisoned in Zimbabwe.
"We are quite ecstatic about the outcome of the matter. The court also found the South African Secret Service's handling of the matter was questionable - they had all the information at hand prior to the men leaving the country," the men's lawyer said.
Obiang - who himself seized power in a 1979 coup - was to have been aducted at an airport in the county by a leading plot organiser Nick du Toit, with a promise that a shipment of new 4x4 vehicles was on its way.
The African leader was to have been overpowered and flown out of the country, and an exiled opposition politician, Severo Moto, flown in from Spain, a state witness told the court.
Du Toit, a South African, is among 11 men serving sentences of between 13 and 34 years in jail in Equatorial Guinea for their part in the 2004 plot.
Dozens of were arrested for the scheme both in Equatorial Guinea and in Zimbabwe, which exposed the plot when it seized a plane carrying suspected mercenaries in Harare.
The case made headlines following the arrest in Cape Town in August 2004 of Mark Thatcher, the son of former British prime minister, Margaret Thatcher.
Mark Thatcher pleaded guilty in a South African court in 2005 to unwittingly helping to finance the alleged coup and was fined about $510,000.