The US-born Briton and his brother Tristan, who say they are innocent, are accused of having formed an organised criminal network in early 2021 in Romania and in Britain.
Prosecutors allege that 38-year-old Tate, his brother, 36, and two women set up a criminal organisation and sexually exploited several victims.
The ruling comes after a Romanian court found "irregularities" in the indictment of Tate in mid-November, ordering prosecutors to rectify them.
On Thursday, the Bucharest appeals court decided to "return to the Public Prosecutor's Office... the case in which the indictment was issued, by which the contestants were sent to trial", it said in a statement.
"They threw me in jail, took my money, my cars, and every ounce of my freedom. They made me the biggest enemy on the streets, dragging my name through the dirt with accusations of the lowest, most vile deeds a man can be accused of," said Andrew Tate in a first reaction.
"This is all a lie," he said in a statement, vowing to "fight to the very end to... prove my innocence".
His brother Tristan said the "decision to reject the prosecution's case underscores the fundamental flaws in the evidence presented."
Tate's lawyer Eugen Vidineac hailed the court's decision as a "significant legal victory" in a statement.
Tax evasion
The Tates also face rape and assault allegations in separate cases in Britain, where they have also been accused of tax evasion.
Earlier this week, UK police in a separate case won a legal bid to seize more than £2 million ($2.5 million) from the Tate brothers to settle millions due in unpaid taxes.
Moreover, a Romanian court in August placed Andrew Tate under house arrest, and his brother Tristan under judicial control over a new investigation involving minors.
Prosecutors are investigating "crimes of forming an organised criminal group, trafficking in minors", "sexual relations with a minor" and "money laundering".
Andrew Tate moved to Romania years ago after first starting a webcam business in the UK.
In 2016, Tate appeared on the "Big Brother" reality television show in Britain but was removed after a video emerged showing him attacking a woman.
He then turned to social media platforms to promote his divisive views.
Giving tips on how to be successful, along with misogynistic and sometimes violent maxims, Tate's videos have made him one of the world's best-known influencers.
His account "Cobratate" on X has more than 10 million followers.
