An initial fine of 30 million euros ($34 million, £27 million) was also reduced to 10 million euros on appeal.

City were accused of deliberately inflating the value of income from sponsors to avoid falling foul of financial fair play (FFP) regulations between 2012 and 2016.

The case against City was reopened when German magazine Der Spiegel published a series of leaked emails in 2018.

However, CAS found that "most of the alleged breaches reported by the Adjudicatory Chamber of the CFCB (UEFA Club Financial Control Body) were either not established or time-barred".

City welcomed the decision that will have huge ramifications on the club's finances and potentially the future of manager Pep Guardiola and star players such as Kevin De Bruyne and Raheem Sterling.

"Whilst Manchester City and its legal advisors are yet to review the full ruling by the Court of Arbitration for Sport (CAS), the club welcomes the implications of today's ruling as a validation of the club's position and the body of evidence that it was able to present," City said in a statement.

"The club wishes to thank the panel members for their diligence and the due process that they administered."

City's victory in court will raise fresh questions over how effectively UEFA can police FFP.

But European football's governing body said it remained committed to the system which limits clubs to not losing more than 30 million euros, with exceptions for some costs such as youth development and women's teams, over a three-year period.

"UEFA notes that the CAS panel found that there was insufficient conclusive evidence to uphold all of the CFCB's conclusions in this specific case and that many of the alleged breaches were time-barred due to the five-year time period foreseen in the UEFA regulations," UEFA said in a statement.

"Over the last few years, Financial Fair Play has played a significant role in protecting clubs and helping them become financially sustainable and UEFA and ECA remain committed to its principles."