The Belgrade tribunal accepted a request for rehabilitation of Dragoljub Draza Mihajlovic, which was filed in 2006 by his grandson Vojislav Mihajlovic, a judge said.
Mihajlovic was a Yugoslav officer who launched the royalist Chetnik movement in 1941 against the Nazis, but later collaborated with them fighting against the communists.
The tribunal annulled the verdict pronounced on July 15, 1946, by the communist Yugoslav authorities that found Mihajlovic guilty of treason and war crimes and sentenced him to death, judge Aleksandar Tresnjev said, according to RTS.
Mihajlovic was not given a fair defence and was not allowed to appeal his sentence, the judge said. He was executed two days after being convicted.
The Chetniks were notorious for war crimes committed against other ethnic groups in the Balkans, notably Croats and Muslims.
In 2005 US authorities handed over to Mihajlovic's successors a decoration from former US president Harry Truman, awarded posthumously in 1948 for rescuing 500 American pilots during the war. The move sparked criticism in the Balkans region namely in neighbouring Croatia.