The University of Texas, Fawcett's alma mater, sued O'Neal, claiming the actress left the $12 million painting to the institution in her will.
O'Neal insisted the late artist personally gave him the work.
A jury ruled Thursday O'Neal may keep the painting.
Fawcett died of cancer at age 62 in 2009.
Celebrity Breakups and divorces of 2014 [PHOTOS]