Judicial sources had said Qaddaf al-Dam was detained in Cairo in March following a gunfight with Egyptian policemen in his apartment and was held despite the extradition demand.
On Monday, the Cairo court also acquitted him of possessing unlicensed weapons and resisting arrest, sources said.
Qaddaf al-Dam had denied the charges against him.
On the day of his arrest, Qaddaf al-Dam and his bodyguards allegedly fired a hail of bullets at masked policemen who stormed his apartment in an upscale Cairo neighbourhood, witnesses had said.
Qaddaf al-Dam, who had an Egyptian residency permit, oversaw relations between Tripoli and Cairo but resigned from his post in February 2011 after the start of the revolt against Kadhafi.
Authorities in Libya said Qaddaf al-Dam is wanted for the "falsification of documents".
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On Monday, the Cairo court also acquitted him of possessing unlicensed weapons and resisting arrest, sources said.
Qaddaf al-Dam had denied the charges against him.
On the day of his arrest, Qaddaf al-Dam and his bodyguards allegedly fired a hail of bullets at masked policemen who stormed his apartment in an upscale Cairo neighbourhood, witnesses had said.
Qaddaf al-Dam, who had an Egyptian residency permit, oversaw relations between Tripoli and Cairo but resigned from his post in February 2011 after the start of the revolt against Kadhafi.
Authorities in Libya said Qaddaf al-Dam is wanted for the "falsification of documents".
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