Kononov had originally demanded 5 million euros ($7.8 million) in compensation for being illegally held in custody by Latvia on charges of war crimes.
"We are glad that justice has triumphed, and that the 85-year-old war veteran, who has endured the hardships of imprisonment and moral and psychological hounding, and who had been illegally prosecuted in Latvia for a long time, has eventually received an unbiased verdict by the European Court of Human Rights," the ministry said in a statement.
The ruling was made on June 19, but was only announced in full on Thursday. The court rejected Kononov's other demands, which included moral damages and compensation for the apartment and plot of land he had been forced to sell in order to pay for court expenses and medical treatment.
Kononov, who led a group of resistance fighters against Nazi Germany in the Baltic state during WWII, was convicted by Latvian authorities of ordering the killing of nine villagers in 1944, with some reports saying the dead included a pregnant woman.
He admitted to the killings, but said the dead were Nazi collaborators, and were caught in the crossfire. Latvia was under German occupation at the time of the incident.
A retired police colonel born in Latvia, Kononov was arrested in 1998 and sentenced to six years in prison in 2000 on genocide charges. In 2004, after several years of litigation, his sentence was cut to 20 months and the charges changed to "war crimes." Kononov filed an appeal with the Strasbourg court the same year.
Russia subsequently applied pressure on Latvian and European authorities over the case, and in April 2004, then-president Vladimir Putin granted Kononov Russian citizenship.
In 2007, the European court dropped all charges against Kononov, and ruled he was not guilty.
"This is my final victory, one I have been seeking for eight long years," he said then.
While Russia maintains that the Red Army liberated the Baltic states of Latvia, Lithuania and Estonia from German invaders, many Latvians and Estonians put the two 'occupations' on a par.
Kononov's lawyer Mikhail Ioffe said on Thursday that Kononov was satisfied with the Strasbourg court's ruling.
Latvia's representative in the Strasbourg court said the Baltic state's Foreign Ministry had examined the court's ruling and was likely to appeal.