Ma, a former justice minister once tasked with stamping out corruption, welcomed what he called a "milestone ruling."
"I am not excited about the verdict because I knew from the very
beginning that I'm innocent," he said.
He condmened the long-running case as "a waste of national resources"
and urged prosecutors not to appeal.
Under Taiwan law, prosecutors have 10 days after the ruling in which to do so.
The ruling removes a dark cloud over Ma's election bid, although he had said during the case that he would run for office even if he was found guilty.
Ma, who was chairman of the nationalist Kuomintang party until he resigned following his indictment, is campaigning for the presidency on a platform of closer ties with China which he says offer the best hope for improving Taiwan's economy.
Under the ruling Democratic Progressive Party (DPP), Taiwan's growth rates have recently fallen to about 4.5 per cent annually, lower than its regional competitors.
In contrast to Ma, DPP presidential candidate Frank Hsieh has emphasised Taiwan's separateness from China.
Hsieh says the democratic island should move to consolidate its de facto independence, without necessarily ruling out liberalised transport and trade ties with the mainland.
But Hsieh is facing potential legal problems of his own, amid allegations from Kuomintang supporters that he received kickbacks in connection with the construction of a subway in the southern city of Kaohsiung when he was mayor there from 1998 to 2005.
Hsieh has denied the charges.
Prosecutors have conducted an investigation into the matter but have not so far issued an indictment.