Italians Gianluigi Nuzzi and Emiliano Fittipaldi, who had published books based on the documents at the heart of the trial, were not considered to have committed a crime on Vatican territory and therefore were outside the judges' territorial authority.
Spanish prelate Lucio Vallejo Balda, who had admitted to leaking secret papers, was handed a 18-month prison sentence while his assistant, who prosecutors admitted had had little to do with the scandal, was acquitted.
Italian PR expert Francesca Chaouqui, described as having inspired the leaks, was given a 10-month suspended sentence.
"Today is a historic day. This is the base of democracy, freedom of the press," Nuzzi told journalists outside the court house in the tiny city state.
Fittipaldi said the Vatican had been "courageous", adding that he had not expected to be acquitted.
The leaks scandal, the second to hit the Vatican, rocked the Roman Catholic Church with its accounts of theft and greed, along with publication of secret recordings of Pope Francis's private conversations.
The books published by Nuzzi and Fittipaldi depicted the Vatican bureaucracy on the verge of implosion due to a cocktail of chronic over-spending, feeble accounting systems and serious irregularities in several departments which may have masked corruption.
Balda, who may appeal the verdict, spent nearly two months in a police cell last year before being released to a state of semi-liberty ahead of the trial.
Balda had admitted to leaking the classified papers but said he had done so under pressure from Chaouqui, with whom he claimed to have a "compromising" relationship.
He also claimed he had been blackmailed by a woman he believed to have links to Italian secret services and other contacts in a "dangerous world".
All five were prosecuted under draconian anti-leaks legislation, rushed onto the Vatican statute book in 2013 as a result of the fallout from the first Vatileaks scandal, which centred on secrets divulged by the butler of now-retired pope Benedict XVI.
Butler Paolo Gabriele was sentenced to 18 months jail time in 2012 after stealing documents in a bid to "fight evil and corruption", and was pardoned by Benedict three months later and banished from the Vatican forever.
Extradition lawyer Alessandro Tirelli said finding the journalists guilty would likely have led to the Vatican requesting they be extradited from Italy, sparking "a polemical wave in the country of the sort the pope hopes to avoid".
He said he thought it probable Balda and Chaouqui would be pardoned by Francis and exiled from the tiny state.