A French appeals court on Thursday released the former Kosovo prime minister Ramush Haradinaj, who was a guerrilla commander during the 1998-1999 Kosovo war.
Haradinaj, now a Kosovo politician, flew into France on January 4, where French authorities detained him at the request of Serbia, which considers him a "war criminal" for his role in the conflict.
The arrest further strained brittle diplomatic ties between Serbia and Kosovo. In January, Serbia said it would hit back if France declined to extradite Haradinaj.
Kosovo's President Hashim Thaci said the court decision was "good news for the Haradinaj family and Kosovo."
"Once again it is proven that the slanders of the Serb secret services against the Kosovo Liberation Army [the wartime guerrilla force] are unfounded and not taken into consideration by the democratic world," Thaci said.
A Serbian court has charged Haradinaj with killings, torture and abductions of Serbs, ethnic Albanians and minority Roma people during and after the 1998-1999 war. Officials said all evidence have been handed over to the French court.
In 2005 and 2007, Haradinaj was tried and acquitted of war crimes at a UN war crimes tribunal in The Hague.
Kosovo wants Belgrade to drop its efforts to prosecute people linked to the conflict.
The 1998-1999 war pitted ethnic Albanian guerrillas seeking independence for the southern Serbian province of Kosovo against Serbia's forces, who withdrew from the territory after an 11-week NATO bombing campaign.
The war ended in June 1999 towards the end of the break-up of the former Yugoslavia.
Albanian-majority Kosovo has a population of some 1.8 million. It unilaterally proclaimed independence in 2008, a move that Serbia refuses to recognise.