Murad Abdurazakov and Abdulkhalim Abdulkarimov had been accused of being involved in the bombing of a celebration marking the anniversary of the end of World War II in the town of Kaspiisk on May 9, 2002.
The attack killed more than 40 servicemen and civilians, including children, and wounded dozens.
A jury in Daghestan's highest court earlier found the suspects not guilty, which led the trial judge to overturn a sentence handed down by a lower court of 18 years in prison for Abdurazakov and 11 years for Abdulkarimov for their purported involvement in a criminal group and illegal possession of weapons.
Prosecutors appealed that ruling in the Russian Supreme Court.
Daghestan's Supreme Court also acquitted a group of servicemen from the 136th motorized infantry brigade in Buynaksk, who had been accused of providing terrorists with a landmine to make the explosive device that detonated in Kaspiisk.