A jury at Luton Crown Court took two hours to acquit Peter Afford, of Bushey, Hertfordshire. Relatives and supporters of the 57-year-old former driver cheered and clapped when the unanimous verdict was returned.
The 1704 Euston to Milton Keynes service ended in tragedy last August when it overran a red light and ploughed into an empty train which was crossing its path at Watford, Hertfordshire.
The crash killed Ruth Holland, 54, a journalist from Apsley, Hertfordshire, and injured 70 other passengers.
Both sides in the case admitted that Mr Afford, who had 34 years experience driving trains, fell foul of a signalling system on the approach to a points junction just south of Watford Junction station.
Mr Afford told the court he did not remember seeing two amber signals further up the track which would have warned him of the approaching red light.
When he finally saw the stop signal he immediately slammed on the brakes, but by then it was too late to stop his four-coach train in time.
The prosecution had alleged that the driver deliberately jumped the amber lights because he was under pressure to reach Watford Junction on time.
The defence highlighted deficiencies in the track and signalling system which meant that a minor driver error ended in disaster. After today's verdict the widower of Ms Holland, Mr Derek Snook, said he was mystified by the jury's decision.
Standing alongside his 15-year-old son Harry, Mr Snook, 70, said: "I realise they took their decision very quickly and felt obviously it was right.
"But I strongly suspect that the verdict would have been entirely different if the railway management had been in the dock with the driver."
He added: "The best thing that can come out of this is to make it a more remote possibility of any subsequent accident on that bit of line."
Mr Snook, who lives in Apsley in Hertfordshire, spoke only briefly about how his family has been affected by the loss of his wife.
He said: "We are obviously devastated at the loss of a beloved wife and mother."
One of the passengers who had travelled on the train, Mrs Sandra Steele, 36, from King's Langley, said she felt sympathy for the driver.
Speaking before the verdict, she said: "I'm not surprised by what I've heard in court about the state of the track and signals."
A solicitor representing 30 other passengers welcomed the verdict.
Nick Mercer said: "In court we heard he was only going one mile per hour too fast to stop the train in time. How many of us travel one mile an hour too fast?
"The safety net on that piece of track was inadequate and we look forward to the report by the Health & Safety Executive to tell our clients exactly what did happen."