Last month, Superior Court Justice Ian Nordheimer ruled that wiretap evidence had to be excluded.
As a result, the prosecution on Friday elected to call no evidence and the accused were acquitted, a prosecution spokeswoman said.
Wallace, a former vice-president, was initially arrested and charged in 2013.
In June 2012, the World Bank cancelled its $1.2 billion credit for the Padma bridge project, saying it had proof of a “corruption conspiracy” involving Bangladeshi officials, executives of a Canadian firm and some individuals.
On December 17 of the year, Bangladesh‘s Anti-Corruption Commission (ACC) filed a graft conspiracy case with Banani Police Station in Dhaka against Mosharraf Hossain Bhuiyan, ex-Bridges Division secretary; Kazi Mohammad Ferdous, the then superintendent engineer of Bangladesh Bridge Authority, and Reaz Ahmed Zaber, the then executive engineer of the Roads and Highways Department.
The ACC in its probe report submitted to the court in September 2014 cleared all the accused in the case of the conspiracy charges, saying none had been found guilty.