Paul Chambers, 28, had sent the message in what he called a moment of frustration at not being able to catch a flight from Doncaster Robin Hood airport.
He had later been arrested and sentenced but the High Court on Friday upheld his appeal against conviction.
Speaking outside the court afterwards, Chambers' barrister John Cooper, who had argued it was wrong to associate the tweet with terrorism, said it was a milestone ruling.
"It's a very big decision both nationally and internationally for hundreds of thousands, if not millions of people who use Facebook and Twitter," he told the BBC.
"It means that if you intend to make a joke and if what you do is a joke, however bad a joke that is, you cannot be prosecuted," he added.
The case revolved around a tweet sent by Chambers to a friend in January 2010, which read: "Crap! Robin Hood Airport is closed. You've got a week and a bit to get your shit together, otherwise I'm blowing the airport sky high!"
Chambers said he sent the tweet to his 600 followers in a moment of frustration and never imagined it would be taken seriously.
"It was surreal. My world became something else," he said when asked how he felt when he was arrested.
Of Friday's ruling he added: "It's an important decision as far as social networks are concerned and as far as Twitter is concerned.
"It has established that there has to be an action that is menacing and is intended to be menacing."
Chambers' case gained the attention and support of thousands of Twitter users and several high-profile British comedians.
In Friday's High Court ruling, three judges headed by the Lord Chief Justice Lord Judge, allowed Chambers' appeal against a Crown Court judge's decision upholding the 2010 conviction.
They said: "If the person or persons who receive or read it, (the message) or may reasonably be expected to receive, or read it, would brush it aside as a silly joke, or a joke in bad taste, or empty bombastic or ridiculous banter, then it would be a contradiction in terms to describe it as a message of a menacing character."
(Reporting By Sophie Kirby)
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