Jamie Glenn Jackson Reed plans to sue police for damages over the March 2013 incident, in which he was thrown to the ground on Oxford Street and later charged with resisting and assaulting officers and using offensive language in public.
All charges have been withdrawn and magistrate Michael Barko on Thursday dismissed the case against Mr Jackson Reed.
He also awarded the man, from the southern Sydney suburb of Jannali, $39,000 in costs.
"He is quiet, but will next be seen on a float at the Mardi Gras," the 19-year-old's lawyer, Chris Murphy, told AAP.
The arresting officer, Constable Leon Mixios, had told the Downing Centre Local Court he arrested Mr Jackson after seeing him kick a woman.
But she has not been seen since and Mr Jackson Reed was never charged with assaulting her, his hearing was told.
The then-18-year-old's arrest sparked community outrage and an internal police investigation after video footage taken by onlookers showed Const Mixios slamming the diminutive man to the ground.
In footage of the viral video played in court, a tearful Mr Jackson Reed repeatedly yelled, "What's his name, I didn't do anything wrong," as Const Mixios grabbed his neck and another officer told members of the crowd to stop filming.
A notebook entry apparently handwritten by Const Mixios after the arrest details how he held the bleeding teenager down with his foot.
"I have pulled him back and thrown him to ground with a leg sweep," the entry read.
"I placed my foot on his back to hold him down as he was bleeding and I didn't want to be contaminated nor did I feel safe getting down with the crowd around us."
Later, according to the entry, "POI (the person of interest) began apologising and asking if we could forget about it and just leave it at that".
