Malaysia's highest court has acquitted Sydney grandmother Maria Exposto, who was sentenced to hang for drug trafficking after her lawyers argued she was the "perfect text book dummy" and victim of an online romance scam.

The 55-year-old woman was convicted last year of trafficking more than one kilogram of crystal methamphetamine, discovered in a black backpack by customs officials at Kuala Lumpur International Airport in December, 2014.

In the Federal Appeal Court of Malaysia on Tuesday there were sighs of relief from family and friends as the Chief Judge of Malaysia delivered the unanimous findings by a full bench of five judges.