In a retrial of the case, the court ruled Wednesday that there was not enough evidence to convict the two Serbs of war crimes for handing over Illy, Mehmet and Agron Bytyqi to members of a special Serbian police unit that subsequently shot and killed them.
The retrial was held after Serbia's Appeals Court overturned an initial acquittal.
The Bytyqis came to Kosovo from New York in 1999 to fight with the ethnic Albanian rebels against Serbia's rule. They were arrested when they strayed into central Serbia from Kosovo. The brothers' bodies were discovered in a trash-filled mass grave in 2001.
Prosecutors said they would appeal Wednesday's verdict.