However the report has raised “serious questions” about whether his son, Kojo, used his family connection to profit from the program.
“I have lots of work to do and I am going to go ahead and do it,” Mr Annan told a news conference.
“This exoneration by the independent inquiry obviously comes as a great relief.”
In an interim report, the panel headed by former US federal banking chief, Paul Volcker said there was no evidence Mr Annan had used improper influence over the 1998 contract given to Swiss firm Cotecna, which employed Kojo, under the oil-for-food program.
But it pointed out Mr Annan’s then-chief of staff last year destroyed three years of documents after the announcement of the Volcker investigation.
It also said Kojo had cut off cooperation with the ongoing investigation, which last month found unethical behaviour by Benon Sevan, the UN official who headed the now-defunct program.
“I love my son and always expected the highest standards of integrity from him,” Mr Annan said.
“I am deeply saddened by the evidence to the contrary that has emerged, and particularly by the fact that my son had failed to cooperate fully with the enquiry. I have urged him to cooperate,” he said.
Revelations about wrongdoing in the US$64b (A$83b) program, which oversaw oil sales by the Iraqi regime of Saddam Hussein between 1996 and 2003, have embarrassed the UN and led to calls for Mr Annan’s resignation.
The Volcker report said the evidence was “not reasonably sufficient” that Mr Annan knew in 1998 that Cotecna was bidding on an oil-for-food contract to inspect goods being shipped into Iraq.
After the contract was reported in the media in January 1999, Kojo Annan “actively participated in efforts by Cotecna to conceal the true nature of its continuing relationship with him,” the report said.
It was later revealed Kojo continued to receive payments from Cotecna as part of a “non-compete” agreement, long after his employment by the firm was said to have ended.
“He also intentionally deceived the secretary general about this continuing financial relationship,” the Volcker panel said.
The panel said the investigation into Kojo Annan and Benon Sevan is continuing.