An Australian man who was facing the death penalty for drug trafficking in Malaysia has been acquitted and released.

Dominic "Jude" Bird, originally from the southern Perth suburb of Success, was acquitted by the court in Kuala Lumpur today.

He was arrested in March last year after allegedly trying to sell 167 grams of methamphetamine to an undercover police officer.

Possession of more than 50 grams of the drug carries a mandatory death penalty in Malaysia.

The judge acquitted Mr Bird saying that the prosecution had failed to prove its case.

The credibility of the police inspector involved in the sting has been repeatedly questioned and he was charged and fined for contempt for attempting to intimidate and bribe a witness two weeks ago.

Lawyers for the Australian say he has been released.