Rahman and the 48 others were found guilty in 2018 in the attack targeting a rally held by supporters of Hasina, who led the opposition at the time, leaving two dozen people dead and wounding about 300 others. A court sentenced 19 of them to death while Rahman got life in prison, with Zia's party accusing the ruling of being politically motivated.
A two-member judge panel scrapped Sunday the entire 2018 ruling for all 49 men, following an appeal lodged by the defendants. Shishir Monir, a defense lawyer, told reporters the court declared the trial and verdict “illegal.”
“As a result, all defendants have been acquitted,” he said.
Zia, who ruled the country as prime minister between 2001-2006, and Hasina are the country's most powerful politicians and longtime rivals.
Nobel Peace laureate Muhammad Yunus has been the country's interim leader since Hasina left, but authorities have been struggling to enforce order amid mob justice, chaos and claims of systematic targeting of minority groups, particularly Hindus, which Yunus said are "exaggerated."
Hasina’s Awami League party blasted the court ruling in a Facebook post on Sunday, saying it wasn't “Yunus’ Kangaroo court" and that the people of Bangladesh would be the ones trying those responsible for the attacks.
Zia's party welcomed Sunday's ruling.
The attorney general’s office can appeal the ruling in the Supreme Court.
The Yunus-led government has not declared any timeframe for the next election, but Rahman and his party want the new election sometime soon. Meanwhile, Jamaat-e-Islami party, which shared power with Zia's party in 2001-2006 with important portfolios in the Cabinet, said it wants to allow the Yunus-led government to stay in power to bring in reforms in various sectors before a new election.
Hasina faces charges of crimes against humanity for deaths during the summer's student-led uprising. The interim government has sought help from Interpol to arrest Hasina. It is not clear if India will respond to any request from Bangladesh for Hasina's extradition under a mutual treaty.