Charges of criminal libel have been dropped against a Kenyan journalist, after the government was taken to the constitutional court.
President Kibaki has promised to fight corruption
Kamau Ngotho's lawyers said the charges were an attack on press freedom.
Attorney General Amos Wako said the colonial-era law would not be used.
Mr Ngotho became the first person to be charged under the law since Kenyan independence, after writing about alleged government corruption.
He told BBC News that he was delighted the charges had been dropped and said his experience would not deter him from investigating official malpractice.
His newspaper, the East African Standard, has also welcomed the announcement.
"We are very glad with this development, more so the promise that criminal libel will not be used to block journalists from performing their duties," said the Standard's chief executive officer Tom Mshindi.
Mr Wako said that in future, any person who thought they had been libelled should seek civil damages, rather than expect the state to press charges for criminal libel.
Western embassies in Kenya had accused the government of seeking to muzzle the media by using the law, which Mr Ngotho's lawyers said was unconstitutional.
The East African Standard has published an apology for sections of the article.
President Mwai Kibaki's government was elected in 2002 on a pledge to end the corruption of the previous government.
Watchdog Transparency International says that petty corruption has been reduced but that Kenya remains 129th on a list of 146 countries in its most recent report on global corruption.
Over the last year, Kenya has come in for fierce criticism from donor nations for not doing enough to tackle corruption in high places.
In July, the UK high commissioner to Kenya launched a scathing attack on the government, accusing ministers and officials of massive corruption.
The diplomats said the use of the law was a "disturbing regression towards practices of the old regime".
The statement from the embassies of Canada, Denmark, Finland, Germany, Norway, Sweden, Switzerland, the UK and USA said they expected the authorities to "encourage investigation of those responsible [for corruption], not seek to muzzle those who ask questions".