Lietenant "Breaker" Morant was pardoned for killing Boer War prisoners in a non-binding appeal heard in the Victorian Supreme Court on Saturday.
Two judges overturned the conviction of the Australian soldier in South Africa in 1902.
The mock trial in Melbourne re-examined the case of Lietenants Harry Morant and Peter Handcock.
AAP reports they were found to be following a superior's orders - a legitimate defence in 1902 - when they killed 13 people in the final days of the war.
Lieutenant George Witton, another Australian officer, was also sentenced to death for the killings, but his sentence was downgraded to life in prison.
Military lawyer Jim Unkles, who has campaigned to pardon Morant for the past four years, said he was elated with the non-binding legal decision.
"When you're accused of serious crimes, it doesn't matter if it was 100 years ago or today, you have a right to be tried according to law," he told AAP on Saturday.
"In the decision today, fair and square, the umpire says these men were not tried according to law."
Mr Unkles said it was a gross injustice for Morant to have been executed before he had a chance to appeal the verdict.
AAP reports Morant was drafted to fight a guerrilla war against the Boers as part of the Bushveldt Carbineers, a story recounted in a novel by Kit Denton and a movie in 1980.
Mr Unkles said the fault for ordering the Boer War prisoner deaths actually falls on Lord Kitchener.
"It's a part of British military history they want to forget," he said.
He will write to the attorneys-general in Australia and Britain to re-examine the case based on Saturday's non-binding trial decision. If that does not work, he plans on taking the case to the British High Court.