A judge ruled that prosecutors failed to prove the charges of involuntary manslaughter, reckless endangerment and misconduct in office against Lieutenant Brian Rice.
Lawyers had argued Lt Rice caused Gray's death by failing to secure his seatbelt inside the police van.
Gray died from a spinal cord injury.
The death sparked days of protests and rioting throughout Baltimore, and prosecutors announced charges against six officers.
Two officers have so far been acquitted, with three more trials expected.
Baltimore Mayor Stephanie Rawlings-Blake thanked the community for their patience and asked for "continued respect for the judicial process as we move forward".
Prosecutors had argued that Mr Rice's actions were intentional and "put together formed a chain" of events that led to Gray's death.
Judge Barry Williams ruled that the prosecutors could not prove that Mr Rice had displayed evil intent rather than making a mistake during a chaotic arrest.
"A mere error in judgment is not enough to show corruption," Judge Williams said in a statement that he read to the court.
This is the fourth time that Baltimore prosecutors have failed to secure a conviction.
The next trial is scheduled to begin on 27 July.
The highest-ranked Baltimore police officer charged in connection with the custody death of Freddie Gray has been acquitted on all charges.