Baroness Warsi was only guilty of a "minor" breach of the ministerial code in relation to a trip she took to Pakistan with a business partner, according a ruling by the Prime Minister's advisor on ministerial interests.
Sir Alex Allan said the Conservative Party co-chairman had accepted she should have informed officials of her relationship with Abid Hussain - a second cousin of her husband - and had already issued an apology .
Prime Minister David Cameron said he was satisfied that Sir Alex's report found that she did not at any point use her office for any personal financial gain.
Mr Hussain - who was involved with Lady Warsi and her husband in a restaurant supply firm called Rupert's Recipes - was among a number of individuals from the UK-Pakistani community recommended by Lady Warsi's office to help organise two "outreach" events as part of her programme.
Mr Hussain attended and spoke at both events although he was not part of the official UK delegation and Sir Alex said he did not receive any government funding for his travel or accommodation.
Sir Alex said he was satisfied that if Lady Warsi had declared her business relationship with Mr Hussain, it would not have been seen as a barrier to him helping to organise the visit.
"Nonetheless, she should have been more aware of the perception of a conflict of interest, and the potential criticism which could arise," he said.
Lady Warsi said in a statement: "I have always maintained that I have never misused my ministerial office for personal or financial gain.
"The allegations on this matter were untrue and unsubstantiated and I am pleased that Sir Alex Allan's report has confirmed that.
"The last month has been a difficult time for me and my family and I am pleased I can now move on from this period and get on with the job that I am privileged to do."
Lady Warsi still faces a separate investigation over allegations she claimed an overnight allowance for staying overnight in London while apparently getting her accommodation for less than the going rate.
