Wenceslas Twagirayezu, who had been a primary school teacher in the north of the country, was also allegedly the local head of the extremist Hutu Coalition for the Defence of the Republic accused of playing a major role in inciting the genocide.
The charges were brought over his suspected role in attacks on Tutsis in the former Gisenyi prefecture in the north.
The genocide targeted the Tutsi minority in large part, but also moderate Hutus, who were shot, beaten or hacked to death by Hutu extremists between April and July 1994 when more than 800,000 died.
The acquittal of Twagirayezu followed contradictory witness statements and evidence he was not in Rwanda at the time of the events he had allegedly been involved in.
The prosecution issued a statement saying it was not "satisfied with the decision of the High Court, Chamber of International and Transnational crimes, acquitting Twagirayezu Wenceslas."
An appeal will be launched, it added.
Twagirayezu had fled Rwanda and arrived in Denmark in 2001. He obtained Danish national after three years and worked in data processing.
But he was extradited back to Rwanda in December 2018.
At the time Kigali had promised he would have a fair trial and urged other countries harbouring suspects from the genocide to "take the appropriate action to put an end to impunity."
The genocide was unleashed shortly after the ethnic Hutu president died when his plane was shot down in an attack the government blamed on Tutsi rebels.
The killing ended when the Tutsi-led Rwandan Patriotic Front took over in July 1994, having defeated the Hutu extremists.
Trials of genocide suspects have been held in Rwanda, at a UN tribunal in the Tanzanian city of Arusha, as well as in France.
KIGALI - A Rwandan with Danish citizenship has been acquitted of genocide and crimes against humanity during the 1994 genocide that struck the African nation, the public prosecutor told AFP on Thursday.
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