The jury of eight men and four women acquitted the two-time presidential candidate of one of six counts involving him taking money from wealthy heiress Rachel "Bunny" Mellon.
When Edwards heard the verdict, he hugged his daughter Kate and his parents, then said, "God answered our prayers."
The ninth day of deliberations took a confusing turn after U.S. District Court Judge Catherine C. Eagles mistakenly believed the jurors had reached a verdict on all six counts. She sent them back to keep deliberating, but after about an hour, they came back and said they couldn't reach a decision on the five other charges: Three other charges he violated campaign finance laws, one charge of conspiracy and on another charge that he made false statements.
After 17 days of testimony, some 500 exhibits and nine days of deliberations, Eagles was forced to declare a mistrial.
Edwards spoke on the courthouse steps after the verdict, thanking jurors and choking up when speaking of his 4-year-old daughter whom he conceived with his mistress.
"My precious Quinn," he said, "who I love more than any of you can ever imagine, [who] I am so close to, so, so grateful for."
Edward also said he believes he did nothing illegal, but that he did an "awful, awful lot" that was wrong and that no one else was responsible for his sins but him.
Edwards, 58, was accused of using nearly $1 million provided by two wealthy donors to help hide his pregnant mistress as he sought the White House in 2008.
Legal experts say it is not likely the government would want to retry this case in criminal court, but it is possible Edwards could face civil charges down the road.
The Associated Press contributed to this report.