"The accused is found not guilty," said Judge Willem van der Merwe as thousands of supporters broke out in loud cheers and singing outside the Johannesburg high court.
Once the frontrunner to succeed President Thabo Mbeki, Mr Zuma had maintained that he had consensual sex with a 31-year-old, HIV-positive woman, the daughter of a family friend, at his Johannesburg home in November.
"In my judgment, the state has not proved the accused's guilt beyond a reasonable doubt," the judge said.
Mr Zuma rose from his seat after hearing the "not guilty" verdict and basked in the applause from his supporters in the courtroom before turning to hug his lawyer Kemp J Kemp.
The "not guilty" verdict pulls Mr Zuma from the brink of political oblivion, but it remains unclear whether the veteran of the anti-apartheid struggle will be able to kick-start his presidential campaign.
His troubles do not end with the acquittal. He is due to go on trial again in July for corruption in a case that led to his dismissal as deputy president last year.
After the verdict, 64-year-old Mr Zuma emerged victorious at a downtown Johannesburg square to address his supporters in his native Zulu language and lead them in his signature liberation-era song "Mshiniwami", or "Bring Me My Machinegun".
"I love you as people, as you love me. I would like to thank you for showing your support with me today," said Mr Zuma, accompagnied by his daughter Duduzile who testified on his behalf during the trial.
In his ruling, the judge agreed with the defence's arguments that the alleged victim was not credible and had made false rape accusations in the past.
The alleged victim, who has known Mr Zuma since she was five years old and regarded him as a father figure, testified that he forced himself on her in the guestroom, having sex without a condom even though he knew that she was HIV-positive.
But the judge sided squarely with Mr Zuma's version of the events on November 2 in his Johannesburg home, finding that no rape took place.
"I find that consensual sex took place between the complainant and the accused in the main bedroom," said Mr Van der Merwe.
Harsh words
He also had harsh words for the former number two for having unprotected sex with a woman he knew was HIV-positive, saying his risky sexual behaviour was "inexcusable."
"It is totally unacceptable that a man should have unprotected sex with a person other than his regular partner and definitely not with a person who, to his knowledge, is HIV positive," said the judge.
The six-hour ruling was broadcast live on all major television and radio stations, while a heavy police presence was deployed in central Johannesburg as a steady stream of Mr Zuma’s supporters converged outside the courtroom.
The crowd, many of whom were dressed in traditional Zulu attire, danced and chanted "Down with Mbeki" and "Zuma is our president. We will die for Zuma".
The governing African National Congress (ANC) and its governing alliance partners, the COSATU trade union and communist party, issued a statement expressing relief that the trial was over and urging "all South Africans to accept and respect the judgment."
The ANC, which swept to power with the end of apartheid in 1994, has been deeply shaken by divisions over Mr Zuma, with his supporters saying that he is the target of a political conspiracy intended to prevent him from becoming the next president when Mr Mbeki steps down in 2009.
It is argued Mr Zuma has enjoyed more grassroots support than President Thabo Mbeki, dismissed in some circles as a cold intellectual who is out of touch with the ANC's rank and file.
But the charismatic number two suffered a blow when Mr Mbeki fired him in June last year and he was charged with corruption, a case that he maintains is part of the political conspiracy intended to crush his presidential ambitions.