Vang Pao was accused by the American government of conspiring to commit terrorist attacks on the Laotian capital, the Pioneer Press reported.
Over 500 Hmong-Americans and supporters rallied for his freedom when he was arrested in 2007.
The Star Tribune reports that no evidence was ever found suggesting that Vang Pao ever viewed or helped to develop the plan. The charges were dropped Friday.
The federal grand jury has indicted 12 others in the same charges.
Vang was a major general for the Royal Lao Army during the Secret War and an ally of the United States. His military activities were supported by the American Central Intelligence Agency. He is a highly respected figure in the Hmong community.