Luke Jeffrey, 18, from Bognor Regis, was found with stab wounds in Alexandra Road in the cathedral city in March.
Samuel Morgan, 19, of Adelaide Road, Chichester, was cleared by a jury at Lewes Crown Court.
Mr Morgan was also charged with possessing a knife in a public place and will face a trial at the same court on 28 November.
Mr Jeffrey was studying at college to be a fitness instructor, the court heard.
A man who was accused of killing a teenager in Chichester has been found not guilty of murder and manslaughter.