FTC Judge Chandrababu acquitted Mr Velumurgan due to lack of sufficient evidence.
In 2004, a 11-member gang allegedly led by Mr Velmurugan and his brothers Kannan and Thirumavalavan murdered AIADMK District Panchayat Councillor Vekatesan (48) of Kullanchavady.
As many as 32 witnesses deposed before the court in connection with the case.
Speaking to reporters after the acquittal, Mr Velmurugan said the then AIADMK Government had slapped the case on him out of vendetta.
He said the judgement was a victory for democracy.
The MLA also said the Supreme Court has dismissed a case filed during the then AIADMK Government against the anticipatory bail granted to him by Madras High Court in the case.