The British duo convicted for their uninhibited Dubai beach romp are to be deported back to UK. Their three-month jail sentences have now been suspended, their lawyer said.
Michelle Palmer, 36 and Vince Acors, 34, were freed at Dubai's Court of Appeal.
Palmer said today's ruling 'proves our innocence.'
Hassan Matter, who represented the couple in court today, said: 'The judge has cancelled the jail. He refused the prosecution appeal (for the sentences to be increased).
'They are free. It's wonderful.
'The judge gave us a good hearing because he has a good heart and a good brain. He understood everything."
Andrew Crossley, who is representing Acors, said it was not clear whether the judge had overturned their convictions.
He said: 'They don't announce the reasons for their decision,'
Mr Crossley said Acors and Palmer were 'chuffed' at today's decision.
'Vince says it hasn't sunk in yet,' said Mr Crossley, of London-based ACS Law.
'They are both chuffed. Vince can't believe it.'
Dubai's Court of Appeal has the power to reduce or increase the three-month terms but prosecutors called for the sentences to be increased, saying it was 'very light'.
Palmer and Acors were arrested in the early hours of July 5 after being seen by a police officer having sex on Jumeirah Beach. They had met earlier at a champagne brunch at a five-star hotel on the emirate.
At last month's hearing, they were found guilty of having unmarried sex and public indecency.
They were fined 1,000 dirhams after admitting to being drunk in a public place.
Palmer was sacked from her job as a publishing executive after the allegations emerged.
Friends say the stress of the proceedings has left her 'in bits.'
Acors was visiting the country at the time of the offences, Daily Mail reported.