Debra Milke was freed in September 2013 after a record of misconduct by a key detective in the case emerged.
The case against Ms Milke rested largely on a purported confession to that detective.
An appeals court in Arizona ruled on Thursday that the she could not be tried again in relation to the killing.
Prosecutors had pushed for a retrial but a panel of three judges said such a move would amount to double jeopardy.
The two men who carried out the killing remain on death row.
Debra Milke, then a 25-year-old insurance company clerk, was accused of dressing her son in his favourite outfit and telling him he was going to see Santa Claus at a local mall.
Four-year-old Christoper Milke was then taken by two men to a desert area north of Phoenix where he was shot three times in the head.
The original trial in 1990 found Ms Milke guilty of arranging the killing, based largely on an alleged confession made to Detective Armando Saldate.
However, Mr Saldate did not record the confession and has since been implicated in several cases of misconduct including lying under oath.
An appeals court ruled last year that prosecutors had known about Mr Saldate's misconduct but failed to disclose the information.
"Non-disclosure of this magnitude calls into question the integrity of the system and was highly prejudicial to Milke," the court said.
Mr Saldate said he feared potential charges if he testified again, and in December a judge granted his request not to give evidence at any retrial.
The court said on Thursday that it wasn't expressing an opinion on Milke's guilt or innocence but merely on the validity of a retrial.
Ms Milke's ex-husband, Arizona Milke, remained convinced of her guilt.
"She shouldn't walk free, because she's guilty," he told the Associated Press.
Lawyers for Ms Milke said they were "thrilled" at the decision not to allow a retrial. However, prosecutors can still appeal to the state's Supreme Court.
Charges have been dropped against a  US woman who spent more than two decades on death row after being convicted of arranging her son's 1989 killing.