The two ex-foreign secretaries stepped down after a cash-for-access scandal uncovered by an undercover TV investigation, but always denied any wrongdoing.
The Parliamentary Commissioner for Standards has now found that neither broke any Commons rules.
Former foreign secretary Sir Malcolm Rifkind and Labour MP Jack Straw were caught on camera by an investigation by Channel 4 and the Daily Telegraph, which showed the two offering to use their influence in exchange for payment from a private company.
Sir Malcolm Rifkind was suspended as the Tories' chief whip following the claims, and both stepped down as MPs.
Prime Minister David Cameron welcomed the standard commissioner’s report clearing Sir Malcolm’s name.
A Downing Street spokesperson said:
After a long and distinguished career in the House of Commons, the Prime Minister welcomes the fact that that Sir Malcolm, and his family, can now put this distressing episode behind them.