Masao Yamazaki was found not guilty of professional negligence over the smash, which happened when the train jumped the tracks on a tight bend during the morning rush hour and ploughed into a residential tower in 2005.
The driver and 106 passengers died in the accident, which also left 550 people injured in Japan's worst rail disaster for four decades.
Yamazaki, now 68, was in charge of safety for operator West Japan Railway in 1996, when the company rebuilt tracks to sharpen the bend at the accident site in the western city of Amagasaki, near Kobe.
Prosecutors in Kobe had argued that Yamazaki should have anticipated danger and that he failed to take proper safety precautions, such as installing a device that can stop a train from travelling too fast.
But Kobe District Court Judge Makoto Okada ruled there was no negligence.
"There were not foreseeable factors...that would have given grounds for him to order the (speed-controlling) device be installed," he told the court.
The crash was Japan's worst rail disaster since 1963 when 161 people died in Yokohama after a freight train collided with a truck and was then hit by two passenger trains.
Yamazaki became president of West Japan Railway after the accident, pledging to reform the for-profit corporate culture in part blamed for the accident, but resigned after prosecutors filed their indictment in 2009.
Survivors of the 2005 disaster and victims' relatives accused three other former senior executives, including Takeshi Kakiuchi, who headed the railway company at the time of accident, of being responsible.
Prosecutors stopped short of indicting them, citing a lack of evidence, but a judicial review panel found the prosecutors' decision inappropriate which led to their indictment in 2010.
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