Justice David Shiri Wyom at the Kaduna State High Court ruled in favour of the defence's no case submission, saying that the state did not present enough evidence to go ahead with proceedings.
Prosecutors had said the supporters of pro-Iranian cleric Ibrahim Zakzaky had conspired to attack the military convoy of army chief Tukur Buratai.
"What the court found was that there was no credible evidence," defence lawyer Maxwell Kyon told AFP.
"It's really a big victory," Kyon said, noting that the ruling could bolster Zakzaky's case.
Zakzaky, who is accused of orchestrating the attack, has been detained since 2015 despite court orders that he should be freed. The court is set to hear his bail application on Thursday.
"He (Zakzaky) is standing trial for having abetted the commission of the offences, so if the court has now found that no such offences were committed, it becomes difficult to convict someone for abetting the omission of these crimes," said Kyon.
Zakzaky has been at loggerheads with Nigeria's secular authorities for years because of his call for an Iranian-style Islamic revolution
Prosecutor Dari Bayero said that he is "in the process" of appealing Tuesday's ruling.
"We are totally dissatisfied with the ruling of the court," Bayero said.
An estimated 100 more of Zakzaky's Islamic Movement of Nigeria (IMN) supporters are still in prison in connection with the 2015 clashes.
Rights groups have accused Nigeria's military of killing more than 300 IMN members and burying them in mass graves following the confrontation.
