Former Clyde football manager Graham Roberts has been awarded more than £32,000 in compensation after winning an unfair dismissal case.
Mr Roberts said the accusation were "total lies"
Mr Roberts, 47, was sacked after being accused of making racist comments to opponents during a tour of Canada.
An employment tribunal said the comments were either highly exaggerated or possibly not true.
Mr Roberts said he had been the victim of the "biggest set-up ever". Clyde said it was disappointed at the ruling.
Mr Roberts said he had been targeted after he challenged assistant manager Joe Miller about missing funds raised for the tour last May.
Mr Roberts, who played for England, Rangers, Tottenham Hotspur and Chelsea, was dismissed as Clyde manager after being accused of calling opposing players names such as "Jew boy" and "pineapple head".
The tribunal ruled that his employers failed to convince them that he made the comments.
The former defender always denied making the remarks.
It was also claimed that he swore at a boy in a wheelchair and threatened to let his tyres down.
The allegations were sent in a letter to Clyde FC and were then investigated by the club's directors.
Mr Roberts was sacked in July last year after a series of meetings.
But tribunal chairman Hugh Murphy said the club had not carried out a reasonable investigation of the allegations.
In particular, he said the club failed to watch a crucial DVD of the match in question, despite it being available at the time.
Mr Murphy said: "No reasonable employer could have failed to realise that some of the allegations against Roberts were, at the very least, highly exaggerated or possibly not true.
"The respondents have not satisfied us that the claimant made these statements.
"It negates our view of a finding that he contributed to his own dismissal."
After the tribunal ruling, Mr Roberts said: "I have had to live with these allegations for a long time now. I am delighted at the outcome reached by the tribunal, which I feel cleared my name entirely.
"I now look forward to getting on with my life and getting back into football, which I've done all my life and is what I'm good at."
He told the hearing he had not been able to find management work as a result of the racist slur.
He said he had applied for about 10 jobs since last July but had failed to land any of them.
He was half-way through a two-year contract at Clyde FC at the time of the Canadian tour last summer.
The trip was organised to celebrate a successful 2005/06 season in which they defeated giants Celtic during a cup run.
In a statement on the club's website, Clyde said: "The club is disappointed with the decision of the tribunal and is in the process of discussing the next step with its lawyers."