The officer, known as Officer A for legal reasons, pleaded not guilty as he faced a retrial in the NSW Supreme Court.
The jury returned verdicts of not guilty for murder and the alternative charge of manslaughter on Monday afternoon.
Dwayne Johnstone, 43, died after being shot outside Lismore Base Hospital as he escaped after receiving treatment there on March 15, 2019.
Officer A fired three shots, the third of which struck Mr Johnstone in the heart from behind.
During the trial, prosecutors disputed whether the first shot was fired as a warning, as was argued by the defence.
Defence lawyers also argued that before firing Officer A identified himself as a corrections officer and shouted "stop or I'll shoot".
Mr Johnstone was taken back to the hospital after being shot but died about two hours later.
Officer A told police that despite having shackles around his hands and ankles, Mr Johnstone was running quickly and he did not believe he or other corrections officers would be able to catch up.
Mr Johnstone had earlier been remanded in custody on charges of assault and possession of a stun gun.
After raising concerns in court about receiving medication, he began convulsing in the courthouse's cells and was taken to the hospital.
Last year the jury in a trial over the same incident was discharged after it was unable to reach a verdict following nearly a week of deliberations.
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