Shawn Sullivan faced spending the rest of his life behind bars under a controversial sex offenders' programme in the US, but two senior judges said this would amount to a "flagrant denial" of his rights.
As a result the 43 year-old - who married a Ministry of Justice official while in jail on remand - will not be put on trial for abusing three young girls almost 20 years ago, and can live freely in London.
Sullivan, who has a previous conviction for assaulting two girls in Ireland and was on an Interpol most-wanted list, is now the 10th person in recent years to see their extradition to the US blocked by either the courts or Home Secretary in this country.
Despite this, campaigners insist the treaty is "lop-sided" in favour of America, and attempts are still being made to block the extradition of alleged computer hacker Gary McKinnon and Richard O'Dwyer, accused of running a website that linked to pirated films.
A spokesman for the US Embassy said: "We strongly disagree with the decision of the court that he should not be extradited to face trial in the U.S.
"Civil commitment is not a penal or criminal sanction; it is rather a means by which the State can protect the community from dangerous behaviour that the committed individual is unable to control."
Sullivan, originally from Fort Benning, Georgia, was accused of raping a 14 year-old girl and sexually molesting two 11 year-olds in Minnesota between 1993 and 1994.
He fled the US as charges were filed against him and moved to Ireland, where in 1997 he was given a suspended sentence for sexually assaulting two 12 year-old girls.
Sullivan came to London on an Irish passport, using the Gaelic spelling of his name, and was arrested in Barnes, south-west London, in June 2010, where he was living with MoJ policy manager Sarah Smith. The couple married in Wandsworth Prison when he was held on remand, before he was released on bail with an electronic tag.
Initially a judge agreed to his extradition and the Home Office dismissed his appeal.
But Sullivan took his case to the High Court earlier this year, with his lawyers claiming that if he were convicted in the US, he faced being put under a "civil commitment" order at the end of his jail term that effectively meant he would be deemed "sexually dangerous" and never released.
The court was told that no one had ever been released from the treatment programme in Minnesota since it was set up in 1988.
Initially the US authorities suggested Sullivan would not be put under civil commitment but later said it was too early to tell.
In a judgment published last week, the High Court judges said there was a real risk he would be put on the programme, and that it would breach his right not to suffer loss of liberty without due process as protected by the European Court of Human Rights.
"It is clear to me that were an order of civil commitment to be made, it would be a flagrant denial of this appellant's rights under Art. 5.1," Lord Justice Moses said.
He and Mr Justice Eady gave the US government a final chance to offer assurances as to Sullivan's treatment but it declined to do so.
In a note released on Thursday, Lord Justice Moses announced that "the United States will not provide an assurance" and so the appeal under the 2003 Extradition Act was allowed.
"The appellant will be discharged from the proceedings," the judge said.