Historian Bent Jensen had made the accusations against former Information journalist George Dragsdaul in a 2007 story based on previously classified Cold War-era documents, The Copenhagen Post reported Friday.
A lower court found Jensen guilty of libel in 2010 and ordered him to pay $37,000 in damages. It ruled the Danish domestic intelligence agency PET had suspected Dragsdaul of being a spy in the 1980s, but failed to find enough evidence to prosecute him.
The Eastern High Court unanimously dismissed the charges against Jensen. Dragsdaul was ordered to pay $111,000 in legal costs.
Dragsdaul has always denied he worked with the KGB. He says he made contact with the KGB after he fell in love with a Russian woman and wanted to get her to Denmark.