Contador will keep his third Tour title and can ride in this year's race, but the International Cycling Union and the World Anti-Doping Agency can appeal the decision to the Court of Arbitration for Sport.
Contador tested positive for the banned substance clenbuterol during last year's Tour. He blamed the result on eating contaminated beef.
"Justice has been served," Contador's lawyer, Andy Ramos, told The Associated Press.
The ruling came three weeks after the Spanish federation recommended a reduced one-year suspension rather than the standard two-year penalty. Contador's team then pushed for him to be cleared and face no punishment.
"We received the case dossier and now Alberto can ride," Ramos said at the federation's headquarters. "The UCI will now study the dossier. From our perspective there is nothing to appeal and we hope the decision is not appealed by the UCI."
The UCI, cycling's governing body, said it was waiting to receive all the documents and will decide on a possible appeal within 30 days.
"The UCI reserves the right to conduct an in-depth study of the reasons behind the decision before expressing its opinion," the UCI said while noting discrepancies in the initial proposal of a one-year ban and Tuesday's verdict.
The UCI confirmed Contador is cleared to race pending any appeal rulings from CAS. The UCI has one month to appeal the federation's decision, while WADA has another 21 days after that. Any appeals process is expected to last until at least June, with the Tour beginning July 2.
Contador is expected to race for his new Saxo Bank-Sunguard team at the Tour of the Algarve, a five-stage race through southern Portugal that begins Wednesday. Contador, the two-time defending champion, is expected to discuss the decision Tuesday in a television interview.
"If everything goes well, the rider will take the start, tomorrow, at the Tour of the Algarve," Contador spokesman Jacinto Vidarte said.
After learning of the proposed one-year suspension nearly three weeks ago, Contador vowed to fight any ban, calling himself a victim of antiquated and flawed doping regulations.
"It's a question of honor, defending your pride and your innocence," the 28-year-old Spaniard said at the time.
Contador presented further evidence based on UCI and WADA rules that allow the "elimination" of a punishment if the athlete can demonstrate "no fault or negligence." A minute trace of clenbuterol was discovered in his test.
Spanish Prime Minister Jose Luis Rodriguez Zapatero added extra pressure on the committee last week by saying "there's no legal reason to justify sanctioning Contador."
Contador says he ate meat contaminated with clenbuterol on a rest day during the tour in July. He avoided becoming only the second cyclist to lose his Tour title after Floyd Landis, who was stripped of his 2006 Tour victory after a positive test.
Contador's case highlights a growing concern that clenbuterol can be consumed unwittingly by eating meat from animals who were fed the drug, which helps burn fat and build muscle. It is on WADA's zero-tolerance list.
In a separate case, WADA chose not to appeal to CAS after the German table tennis federation decided not to ban Dimitrij Ovtcharov. He tested positive for a minute trace of clenbuterol from meat eaten in China.
Contador -- one of only five cyclists to win the Tour, Giro d'Italia and Spanish Vuelta -- also won Tour titles in 2007 and 2009. He was unable to defend his first title in 2008 after his Astana team was banned for doping.NEWS BY LOCATION | ABC30 BLOGS | DISCUSSION FORUMS
BECOME A FAN ON FACEBOOK | FOLLOW ABC30 ON TWITTER