Prosecuting QC Ciaran Murphy told Belfast Crown Court that after "conducting a careful review of the evidence," the Public Prosecution Service had instructed him to offer no evidence against 53-year-old David Mayberry Wallace.
Wallace, originally from Northern Ireland but now with an address at Shaw Street, Bury in Lancashire, had been accused of murdering 65-year-old Stanley Close in a flat at Canton Court in east Belfast in August 1986.
Mr Close, who had been strangled to death, was a convicted killer himself having served 10 years behind bars for the manslaughter of Kevin Kielty.
Mr Kielty was gunned down at a bar on the Ormeau Road in July 1971.
On Monday, trial judge Mr Justice Burgess told the jury of six men and six women that given they had taken an oath to come to a verdict on the evidence, of which there was none, he was ordering them to record a verdict of "not guilty by direction".