Kenteris, 31, and Thanou, 30, missed drug tests on August 12, one day before the 2004 Summer Games began, deeply embarrassing the Greek Olympic hosts.
But a Greek sporting tribunal voted 4-1 on Friday to clear the runners, instead blaming coach Christos Tzekos for the no-shows.
The IAAF, which temporarily suspended the athletes in December pending the ruling by the Greek Amateur Athletic Federation, said it was “very surprised” by the panel’s decision. The organisation still could reject the decision.
Tzekos and his sprinters still face criminal charges in the case.
Last November, Kenteris and Thanou were charged by a Greek prosecutor with avoiding a doping test and faking a motorcycle accident the sprinters claimed prevented them from taking the test. Tzekos also was charged with illegally importing and selling banned substances. Trial in the case is expected in about a year.
Tzekos was suspended Friday from athletic competition for four years for failing to properly notify the runners about the drug test, but was cleared on separate allegations of distributing banned substances. He enthusiastically welcomed the news.
“The decision is very good, but someone has to pay,” he said. “I think their (Kenteris’ and Thanou’s) careers are not over and they can still make our country proud … and win gold medals — that would make me the happiest man.”
The Greek tribunal ruled after a two-month-long hearing that there was insufficient evidence against the sprinters.
“The notice given (for the Athens test) was not in line with IAAF guidelines,” the ruling said. “The chain of notification stopped with Mr Tzekos.”
If the IAAF rejects the tribunal’s ruling, the case could end up at the Court of Arbitration for Sport.
“We’re very surprised by the decision,” IAAF spokesman Nick Davies said. “Now we’ll be waiting to receive the full documentation and explanation.”
Kenteris won the 200-metre gold medal at the 2000 Sydney Olympics, and Thanou took silver in the 100 metres at the same games. Both were national heroes in Greece, showered with honours and sponsorship deals, until the scandal broke.
The sprinters failed to appear for doping tests at the Olympic Village, and then spent four days in a hospital, claiming they were injured in a motorcycle crash, before withdrawing from the games.
Kenteris was spotted training at an Athens sports facility on Friday, but there was no immediate reaction from the runners, who have always maintained their innocence.
Kenteris’ lawyer, Gregory Ioannidis, said the sprinter was “understandably delighted” by the verdict.
“Mr. Kenteris was never asked to submit to a test by the International Olympic Committee so he could not possibly have been guilty of deliberately avoiding one,” Ioannidis said.