Kim Kwang-ho was the highest-ranked police official to be charged over the tragedy in the Itaewon nightlife district.
During Thursday's verdict, the court said that prosecution evidence was insufficient to show that Kim neglected his duties before the incident and during the preliminary response.
A lower-ranked police official, Lee Im-jae, was sentenced last month to three years in prison for failing to prevent the crush that shocked the world.
The verdict has been met with strong protests from the victims' families.
Kim was indicted only last January, more than a year after the tragedy. The families said he should have been charged earlier. He was dismissed from his post in June after receiving disciplinary action over the crush, according to Yonhap.
Two of Kim's co-accused who worked as situation management officers on the day of the crush, Ryu Mi-jin and Jeong Dae-gyeong, were also found not guilty.
In a statement reported by Yonhap news agency, the victims' families said they strongly condemned the verdict and called on prosecutors to file an appeal.
"The court missed an opportunity to reflect on the gravity of the responsibility of public officials to protect the lives and safety of the public, and to remind state leaders and members of society of this," the families said.
"The prosecution's weak investigation and the court's passive interpretation of the law have delayed the punishment of those responsible for the tragedy and violated the rights of victims once again," they said.
A special police panel earlier investigated the case and in January, it released its report that largely spared senior government officials from blame.
The report instead held local municipal and emergency service officials responsible for weak planning and a poor emergency response.
Most of the victims who died on the night of 29 October 2022 were young people celebrating Halloween in Itaewon, known for its buzzing bars and restaurants lining narrow streets. The crush happened in one of those cramped alleys.
Some accounts say more than 100,000 were in the area that evening. The incident shook South Korea and ignited accusations that authorities did not do enough to prevent the tragedy.
Joel Guinto