However her husband, Iñaki Urdangarin, 49, received a prison sentence of six years and three months by the court in Majorca.
Princess Cristina, who is sixth in line to the throne, is the first member of Spain’s royal family to go on trial since the monarchy’s restoration in 1975.
Urdangarin was accused of using his royal connections to generate business income used for private spending. The case included 16 other defendants, more than 300 witnesses and a 70,000-page indictment.
The case began in 2010 and became highly charged because many believed it symbolized perceived corruption among Spain’s elites – including the royal family.
King Felipe stripped his sister and her husband Inaki Urdangarin of their titles, the Duke and Duchess of Palma de Mallorca, in 2015
Although she was absolved of criminal charges, Princess Cristina will still have to pay a fine of $282,000, which reflects her civil liability.
The court also ordered her husband to pay $532,675 in fines and financial penalties.
Princess Cristina was facing a possible prison sentence of eight years if she had been found guilty.
She took the stand in her defense in March 2016, saying she “didn’t concern herself” with her husband’s business affairs.
The case was heard in Palma de Mallorca, the regional capital of Spain’s Balearic Islands, because many of Urdangarin’s business deals related to the area.
Neither Princess Cristina nor her husband were in court for the February 17 verdict, which was originally expected to be handed down last year.
Although they live in Lisbon, Portugal, the couple and their four children were reported to be staying in Geneva, Switzerland until the case is resolved.
None of the family members were in court for the verdict, which is subject to appeal. Both Princess Cristina and Iñaki Urdangarin have denied any wrongdoing.