Former Deputy Prime Minister LK Advani, and BJP leaders MM Joshi and Uma Bharti, had denied charges of inciting extremists to demolish the 16th Century Babri mosque in the town of Ayodhya.
The demolition sparked violence that killed some 2,000 people.
It was also a pivotal moment in the political rise of the Hindu right-wing.
Wednesday's verdict acquitted 32 of the 49 people charged - 17 had died while the case was under way. The court said there was insufficient evidence to prove the demolition had been planned.
Hindus believe the mosque was built over the birthplace of their deity Lord Ram.
The controversial verdict comes nearly a year after another historic judgment over the site of the mosque. Last year, the Supreme Court gave the land to Hindus, ending a decades-long legal battle. It gave Muslims another plot of land in Ayodhya on which to construct a mosque.
In August, Prime Minister Narendra Modi laid the foundation stone for a Hindu temple at the site - a core promise made by his BJP and a hugely symbolic moment for its strident Hindu nationalist base.