Ramush Haradinaj returned to jubilant crowds in Kosovo and was given the red carpet treatment and greeted by Prime Minister Hashim Thaci.
"I am happy that international justice has confirmed our path to freedom was just and clean," Haradinaj said during a news conference flanked by Thaci. "I will work with all of you to move this country forward."
The verdict was issued in the U.N. court's first ever retrial, which was ordered after appeals judges branded the 2008 acquittals
Brahimaj was convicted of torture at the first trial and that was not retried, but he has served his sentence and will be released with the others.
The acquittals herald a political renaissance for Haradinaj, seen by the West before his 2005 indictment as a unifying force in Kosovo, but could complicate talks between Pristina and Belgrade on Kosovo's future.
Highlighting the deep division in the country, Serb leaders in the ethnically split north reacted to the acquittal by deciding to prevent the construction of a jointly managed border crossing agreed
In Kosovo's capital, Pristina, supporters set off fireworks and honked car horns. Others danced and clapped as they watched the verdicts on a giant screen when Presiding Judge Bakone Moloto delivered the verdicts.
Moloto said Serbs and their suspected supporters were beaten at a KLA compound in Kosovo and at least one of them died of his injuries. However, he said that there was no evidence Haradinaj was involved
Haradinaj quit as Kosovo's prime minister in 2005 after just 100 days in office when his indictment was announced by the tribunal, but he remains popular at home.
"The eagle has landed! Welcome home Mr. Haradinaj!" Kosovo's minister for European integration, Vlora Citaku, posted on her Facebook page.
Large posters welcoming him back were hung well before the decision was announced in The Hague. Late Thursday crowds remained on the main street in Mother Teresa square in Pristina waiting for Haradinaj to address them.
For Haradinaj's Alliance for the Future of Kosovo, which has been in decline since his trial, the return could herald a new era.
"This definitely opens up opportunities for his party which has been limited because of the indictment against Haradinaj," said Agron Bajrami, the editor-in-chief of Albanian language daily Koha Ditore. "But, it still depends on what sort of an agreement they coin with the current prime minister."
Serbian officials and media had been anticipating for days that Haradinaj would be acquitted less than two weeks after two Croatian generals were cleared of charges of killing and deporting Serbs in a 1995 military blitz, a judgment that sparked rage in Belgrade, where many see the tribunal as anti-Serb.
Serbia's war crimes prosecutor Vladimir Vukcevic described Thursday's acquittals as "unjust" and the result of "unprofessional" protection of witnesses.
Serbia Prime Minister Ivica Dacic said that despite the verdicts, Serbia will not pull out of talks with Pristina.
"Continuation of dialogue and the process of integration in the European Union are in Serbia's interest," he said.
Rights group Amnesty International urged that the search for justice does not end with Thursday's verdict.
"Today's verdict raises the question of if, as the court has established today, the three former high-ranking KLA members are not guilty, who then committed those crimes?" said John Dalhuisen, in charge of the group's Europe and Central Asia program.
Associated Press writers Jovana Gec and Dusan Stojanovic in Belgrade, Serbia, contributed to this report.