MADRID - A Spanish court on Friday acquitted King Felipe VI's sister in her trial over charges that she helped her husband evade taxes.
But Princess Cristina's husband Inaki Urdangarin was jailed for six years and three months for siphoning off millions of euros between 2004 and 2006 from a foundation he headed in the island of Majorca.
The 51-year-old princess was the first Spanish royal to face criminal charges since the monarchy's 1975 restoration.
The ruling said: "We must acquit and we are acquitting Cristina Federica... of tax fraud, of which she was accused."
However, Princess Cristina was ordered to pay a fine of $282,000 because she had benefited from her husband's wrongdoing. Her husband was fined 512,000 euros.
The case, which was heard by a court in Palma, sullied the reputation of the royal household and became a symbol of perceived corruption among Spain's elites.
The scandal broke in 2011, just as the country was going through a deep economic crisis.
Princess Cristina could have faced eight years in prison if she had been convicted of fraud over her 49-year-old husband's work with the non-profit Noos Institute sports foundation.
Urdangarin, a former Olympic handball medallist was charged with the more serious crimes of embezzlement, influence peddling, forgery and money laundering.
The couple, who have been married since 1997 and have four children together, went on trial last year along with 15 others, including former government minister Jaume Matas.
After her 1997 fairytale marriage to Urdangarin, Princess Cristina became a treasure of the celebrity press and won praise for having a salaried job.
But eventually, people began to raise eyebrows at the couple's lavish lifestyle.
In 2004 they purchased a 1,200-square-metre house for $6.3-million in Barcelona, with centre-right daily El Mundo asking: "Where is the money coming from?"