"We have always been honest and we are extremely proud of this recognition by the Italian Court of Justice. Viva l'Italia," the two fashion house chiefs said in a statement on Friday.
"The Italian Supreme Court of Justice found Domenico Dolce and Stefano Gabbana not guilty of tax evasion," a company press release said.
The Italian Supreme Court of Justice found Domenico Dolce and Stefano Gabbana not guilty of tax evasion. "We have... pic.twitter.com/ZUQUkcK9gW— Dolce & Gabbana (@dolcegabbana) October 24, 2014
In April an Italian appeals court had upheld a guilty verdict against Dolce and Gabbana for evading taxes totalling €200 million.
Dolce and Gabbana, whose celebrity clients include Beyonce and Madonna, were accused of having transferred control of their brands to a shell company in Luxembourg in 2004 and 2005 to avoid paying Italian taxes.
Prosecutors had argued that setting up the Luxembourg company Gado - an acronym of the surnames of the two designers - while the operation was being run out of Italy was a bid to defraud the state.
They were found guilty in June 2013, and given 20-month jail sentences, which they appealed.
Dolce and Gabbana were originally accused of tax evasion of around €1 billion, but the court ruled that just €200 million of that sum was relevant.
On Friday the Supreme Court annulled the conviction, declaring that the prosecution case was "unfounded" and ending the case, Italian media reported.