The investigators said a leakage in the cooling system affected the thrust on the main Vulcain-2 engine, causing the vehicle to spin out of control.
The rocket's self-destruct mechanism destroyed the launcher 456 seconds into the flight, dumping two satellites worth 600 million euros into the Atlantic Ocean.
Further studies are required but it seems the results of the inquiry board will clear the way for the launch of the Rosetta comet mission in the next few weeks.
New components
The probe, which will attempt to orbit and land on Comet Wirtanen, is one of the most daring space missions ever planned and has cost the European Space Agency (Esa) almost a billion euros.
The spacecraft is waiting for launch at the Kourou spaceport in French Guiana. It will go up on a standard version of the Ariane 5 - not the new configuration that was lost on 12 December.
Officials have suspended launch preparations fearing similar components on the older rocket could be at risk.
But Jean-Yves Le Gall, director-general of Arianespace, said the standard Ariane 5 "has been exonerated by the inquiry".
What went wrong on Flight 157 was down to new components in the ECA.
Experts will now double-check the Rosetta mission plan before giving a final go-ahead, probably on Tuesday, he said.
Mission redesign
There is an urgency to get Rosetta off the ground. It has a short window in which to launch because it must fly a complex series of manoeuvres around Earth and Mars to build up the speed it needs to catch Comet Wirtanen.
If it fails to launch in January, Esa will have to spend several millions of euros more redesigning the mission for another target comet - assuming it can find one that is scientifically as interesting.
The failure of the Ariane 5-ECA was a major blow to the Arianespace consortium.
The vehicle, which is designed to lift 10 tonnes of payload towards geostationary orbit, was supposed to cement the company's position as the world leader in the satellite launcher market.
Future market
Arianespace is facing tough competition in what has become a very flat market in the last few years.
US companies, in particular, look strong, with both Boeing and Lockheed Martin successfully launching new rival rockets just weeks before the December failure of the ECA.
Arianespace is putting all its effort into the Ariane 5 - the older, very reliable Ariane 4 will be retired after one last flight.
The Ariane 5 has flown just 14 times. Twice it has failed; twice it has put satellites in the wrong orbit.
Deformed nozzle
The inquiry board, led by Wolfgang Koschel, a German professor of space engineering, reported that there was a leak in coolant pipes that encircle the rocket's tail nozzle, which may have been caused by cracked welding.
Because it was not cooled down, the nozzle overheated and deformed, pushing the rocket off course 170 seconds after launch.
The coolant system was one of several major modifications introduced on the ECA to boost its performance.
Le Gall said Arianespace had set itself the "extremely ambitious but realistic goal" of fixing the problem within six months.
Until the necessary changes are made, the standard version of the Ariane 5 will carry all payloads.
The company has orders to launch 41 satellites, and customers had been "very understanding... there have been no cancellations," Le Gall said.