Entertainer Michael Barrymore has won a high court compensation battle with Essex Police and could be awarded millions of pounds in compensation.
The entertainer, 64, had argued at the High Court the arrest had destroyed his career.
Another hearing will assess exactly how much money Barrymore with be paid but his team will press for an estimated £2.5m.
The comedian was arrested by the force in 2007, six years after a body was found in his swimming pool.
He was held on suspicion of the rape and murder of Stuart Lubbock, but the star was never charged and has always insisted he is innocent.
Mr Lubbock was found unconscious at Barrymore's Essex home and died at the scene.
He was found to have Class A drugs in his system and severe anal injuries consistent with sexual assault.
Essex Police admitted that Barrymore's arrest was unlawful after a procedural error.
The error meant the arresting officer was not given enough grounds for suspicion as he had not been a part of the investigation.
The High Court hearing was to determine whether or not the former Strike It Lucky star should get nominal damages of £1 or substantial damages.
Barrymore's legal team said said: "After all these years, Michael Barrymore is relieved the Judge has found that he could not and would not have been lawfully arrested on suspicion of the rape and murder of Mr Lubbock.
"In doing so, the judge made it clear that there was no evidence linking Michael to the infliction of the injuries suffered by Mr Lubbock as Michael has always maintained.
"The judge found that the police had no reason to disbelieve him when he said that he had left the scene after the ambulance was called, not for any sinister reasons - but in order to avoid a media scrum.
"He had gone to a flat nearby and his personal assistant told the police where he was.The judge also found that he was always co-operative with the police by agreeing to be interviewed and providing statements whenever asked.
"The judge also roundly dismissed the alleged 'bad character' evidence relied on by the police calling it 'flimsy, one-sided and misleading' and not capable of being reasonably relied on by the police to support a decision to arrest him."
An Essex police statement read: "Today's judgement must not overshadow the questions which are still unanswered for Mr Lubbock's family and friends.
"Sixteen years on they still need to know what happened to Stuart on that night, how he was injured, and who is responsible for his death.
"A small number of people know the answers to those questions and over the years loyalties change and somebody may want to help us at this time."
During the hearing, which ran for a week in May, Essex police attempted to show they had a strong case for arrest - but faced criticism.
High Court Judge Mr Justice Stuart-Smith described one piece of evidence as "double double hearsay".
After assessing the evidence over several weeks, the judge concluded: "The defendant [Essex Police] has failed to prove that, if not arrested unlawfully as he was, Mr Parker [Barrymore] could and would have been arrested lawfully... Mr Parker is entitled to recover more than nominal damages."
Barrymore's legal team say the arrest caused "devastating damage to his career".
It took place when he was attempting to make a come back. He appeared on Celebrity Big Brother a year before on Channel 4.
Mr Barrymore was not present in court for the decision.
(c) Sky News 2017