The verdict, still appealable, was reached on grounds of insufficient evidence, according to the source.
The acquitted will be discharged from prison even if prosecutors appeal the case, the source noted.
For his part, head of East Cairo prosecution Wael Hussein told Anadolu Agency that the prosecution will file an appeal against the verdict within two weeks.
The defendants had been detained since last July pending trial. The announcement of the verdict was reportedly met with jubilation inside the courtroom, where some of the defendants chanted "long live justice" and "God is great."
They faced charges of rioting, thuggery, inciting violence and assaulting policemen during violent clashes in Ramses Square on July 15 in the wake of the military's ouster of Morsi on July 3 following mass protests against his rule.