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2 August 2019, 17:52 | Updated: 2 August 2019, 17:54
Police Constable Paul Birch had denied unlawfully and maliciously causing GBH to Andrew Cash while on duty in September 2017.
Footage appeared online of his service dog biting and wounding a Traveller on September 4 2017.
It had been alleged the 50-year-old West Midlands Police officer had called colleagues before the altercation to say "there are some gypos down here, we need back-up".
But after a three-day trial at Birmingham Crown Court, a judge directed jurors to find Pc Birch not guilty of grievous bodily harm on Thursday, the Independent Office for Police Conduct (IOPC) said.
The policing watchdog said the decision followed a successful application by Pc Birch's barrister that the prosecution had put forward insufficient evidence and there was no case to answer.
The charge was brought after an IOPC investigation into an incident in which Pc Birch and fellow officers were called to the former North Worcestershire Golf Course at Northfield, Birmingham, following reports of roof tiles being stolen.
Jurors were shown CCTV of the moment Mr Cash was bitten and heard he was taken to hospital after the incident.
An IOPC spokesman said: "On completion of our investigation in May 2018 we sent a file of evidence to the Crown Prosecution Service, which authorised the charge last October.
"We concluded that Pc Birch had a case to answer for gross misconduct for excessive use of force.
"We await confirmation from West Midlands Police as to how they will proceed with the disciplinary matters."