The court in Colmar, in the northeastern France, released Haradinaj after the decision, AP reported.
It also opposes Kosovo's independence, declared in 2008, and has blocked its accession to the United Nations and its bodies.
He told AFP in an interview this month that he is the victim of "political persecution". She said it is unclear whether he will stay in France.
"I said it openly that the request to extradite me in Serbia is a call for war", he said.
Kosovo President Hashim Thaci welcomed the court's decision, while the head of Serbia's parliamentary committee on Kosovo, Milovan Drecun, expressed concerns that the ruling was political.
Haradinaj has twice been acquitted by the Hague-based court for the former Yugoslavia of committing war crimes during the 1998-99 Kosovo conflict.
"Once again it is proven that the slanders of the Serb secret services against the Kosovo Liberation Army (the wartime guerrilla force) are unfounded and not taken into consideration by the democratic world", he said in a statement.
The 48-year-old, who now leads the opposition Alliance for the Future of Kosovo, is accused of committing war crimes in June 1999 when he was Kosovo Liberation Army commander.
Haradinaj was detained by French authorities on January 4, and the Colmar court the next day ordered him to remain in custody.
A Serbian court has charged Haradinaj with killings, torture and abductions of Serbs, ethnic Albanians and minority Roma people during and after the 1999-1999 war.
Mr Haradinaj has consistently denied the allegations, and stepped down as prime minister after just 100 days to face the charges.
But the EU-brokered deal between Belgrade and Pristina to improve and regulate ties between the two states has only been moderately successful.
Islamic State, Taliban clash in Afghanistan, dozens killed
Kelly said conditions are so dire that some Afghans sign up for the military just to receive a weapon so they could sell it. So why don't we pull the plug? If the Taliban cannot be beaten back, perhaps they can be brought to the negotiating table.
O'Reilly to return with new podcast episode Monday
After taking "O'Reilly" out of the title, " The Factor " ended its run on Friday night, with Greg Gutfeld filling in as host. He will also set to have a new Twitter, moving on from his "The O'Reilly Factor" account.