The court acquitted Sheikh Issa bin Zayed al-Nahayan "after establishing he was not responsible" for the torture of the Afghan merchant in 2004, lawyer Habib al-Mulla said.
Allegations against the sheikh emerged after the video, aired in April, appeared to show him beating a man with whips, electric cattle prods and a wooden plank with protruding nails.
Assisted by police, Sheikh Issa is seen to pour salt in the man's wounds and run over him with a four-wheel drive.
The victim needed months of hospital care following the incident.
He was reportedly an Afghan trader who lost a consignment of grain worth $US5000 ($5450).
However, the UAE court accepted the sheikh's defence that he was "under the influence of drugs that left him unaware of his actions", his lawyer said.
The two US defendants of Lebanese origin, brothers Ghassan and Bassam Nabulsi, were sentenced to five years in jail each in absentia for having drugged the sheikh.
The lawyer said the Afghan victim had demanded compensation from the brothers rather than from Sheikh Issa.
Bassam Nabulsi reportedly leaked the video which exposed the case.
The court also sentenced three other workers at the farm where the torture took place to between one and three years in jail for drugging the sheikh, likewise in absentia, according to Mulla.
A guard at the farm was acquitted.
Mulla said Sheikh Issa, 40, who has been in detention for the past seven months, would be released.
The verdict, however, is not final as it will have to be reviewed by a higher court if the public prosecution decides to challenge the ruling.
Sheikh Issa, who is the brother of UAE President and oil-rich Abu Dhabi's ruler, Sheikh Khalifa bin Zayed al-Nahayan, pleaded not guilty at a hearing last month.
The lawyer told the hearing in December the sheikh had been drugged against his will during the incident and had no recollection of what had happened.
"We submitted medical reports showing that the drugs that the two co-defendants administered to him left him unaware of his actions," the lawyer said on December 15.
In a rare trial of a high-ranking member of the ruling family, Sheikh Issa was charged at an opening hearing last October with endangering life, causing bodily harm and with rape for the incident.
The lawyer told the court that one of the sheikh's co-defendants was responsible for Sheikh Issa's medications and had drugged him, then videotaped the incident and tried to blackmail him.