Officials at Camp Lejeune say Lance Cpl. Julian Ramirez, 25, has been cleared of all charges, including attempted murder, conspiracy and destruction of government property.
The Marines say recommendations involving charges against the other Marine, Lance Cpl. Antoine Boykins, 21, are still being reviewed.
Three Marines were injured Sept. 21 when their parachutes failed to open after a jump from 1,250 feet; each landed with a reserve chute. Investigators said 13 of the 22 parachutes had been tampered with.
At a hearing last month, a military prosecutor said the two Marines secretly cut suspension lines to avenge the ill will of their platoon commander.
But one of Ramirez's attorneys told the judge that no forensic evidence presented in the military hearing - the equivalent of a civilian grand jury - tied his client to the crime.
Ramirez's lawyer, Dick McNeil, said Wednesday that his client was freed March 31. McNeil said the decision reflects a lack of evidence against Ramirez "as well as the lack of credibility of the co-accused."
"He was elated. His family was overjoyed. It's a huge relief for us," McNeil said. "I give credit to the government for doing the right thing."
McNeil noted that the charges were dropped "without prejudice," meaning he could be charged again should new evidence arise. McNeil said he did not expect that.
He said Ramirez has returned to duty, though most of his unit is in the Middle East. Ramirez will probably not be sent to join them in case he is needed to testify against Boykins, McNeil said.
Maj. Paul McConnell, the military judge presiding at the hearing, was to decide whether the Marines should be court-martialed. Both suspects could have received life in prison without parole if convicted of the charges at a court-martial.