A court in New South Wales on Thursday ruled in favor of Wilson, saying there was reasonable doubt the clergyman had ever committed the crime, according to a statement from New South Wales Courts.
The 68-year-old Wilson had been the highest-ranking Catholic official ever to be convicted of covering up sex abuse. He avoided prison after a court earlier sentenced him to home detention under his sister's custody.
Wilson resigned his post in July, even as he continued efforts to appeal the original conviction.
Historic cover-up
The original guilty verdict against Wilson was seen as a pivotal moment with potentially far-reaching implications for other clergy members implicated in the child sex abuse scandal that's engulfed the Catholic Church globally.
Wilson was an assistant priest when Fletcher, a Catholic priest based in the Hunter Valley of New South Wales, abused altar boys in the mid-1970s.
Prosecutors had argued the Archbishop failed to report the abuse to authorities, allowing Fletcher to remain in the clergy and abuse other children.
Wilson and Fletcher went their separate ways after 1976. Wilson then begin his climb through the church's hierarchy, an assent which took him to the role of Archbishop of Adelaide in 2001.
Fletcher was never charged with any offending relating to his behavior in 1976. However, in 2004, Fletcher was convicted of eight counts of child abuse and later sentenced to 10 years in prison. The eight charges were committed between 1989 and 1991.
Fletcher died in prison in 2006. Wilson was charged in 2015, accused of failing to report Fletcher's abuse to police.
Ongoing scandal
The case comes as Australia is still grappling with historic accusations of child sex abuse in the country's Catholic Church, which has been subject to numerous investigations including a Royal Commission.
There was anger among many survivors in August when the Church rejected calls for priests to be compelled to report child abuse revealed in confessionals.
The Church said it would accept "98%" of recommendations made by a high-level government inquiry into child sexual abuse, which uncovered shocking accounts of widespread abuse inside Australian religious institutions.
But church leaders said that they would maintain the sanctity of confession, arguing to remove it would infringe on religious liberties.
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