Jon Platt refused to pay the charge for taking his family on the holiday after her Isle of Wight school refused permission for seven days of absence.
After returning from the break in April last year, which included a visit to Walt Disney World, he was issued a £60 fine that quickly doubled when he refused to pay.
The battle escalated to reach the Isle of Wight Magistrates’ Court in October, where Mr Platt won his case, but the local authority appealed the decision to the High Court.
Lord Justice Lloyd Jones and Mrs Justice Thirlwall dismissed the council’s challenge on Friday, ruling that the magistrates had not “erred in law” when reaching their initial decision.
The two judges said the magistrates were right to take into account the “wider picture” of Mr Platt’s daughter’s regular attendance record when they decided he had “no case to answer”.
Speaking outside court after his victory, he said: “I am obviously hugely relieved. I know that there was an awful lot riding on this – not just for me but for hundreds of other parents.”
Many were celebrating the triumph of “common sense” on Twitter, with some hailing Mr Platt a “hero”.
The father said the case had cost him £13,000, which he described as “money well spent”, and has crowdfunded £25,000 to cover legal costs.
Taking his six-year-old daughter out of school was not about the cost but rather the principle that he should not be criminalised for doing so, he said.
“If the law required 100 per cent attendance, if the law said your children must attend every single day in order to get a great education, the law would say that – but it does not,” he told ITV’sGood Morning Britain programme.
“We are not arguing on behalf of people whose kids don’t go to school, I’m arguing on behalf of people whose kids go to school every single day and maybe once a year they take them out for five days.
“It does not harm them at all. How do I know? Because my own kids are doing really, really well in school. They never had 100% attendance but they never had less than 93% attendance.
“Paying the fine was an acceptance that I had committed a criminal offence, I was so indifferent to my children’s wellbeing that it amounted to a criminal offence.
“That’s just not true – I’m not such an incompetent parent or so indifferent to their wellbeing that I should be criminalised for it.”
Mr Platt was fined £60 again in February after taking his daughter on another trip out of school holidays to Lapland.
He was prosecuted under section 444 of the Education Act, which stipulates that parents are guilty of an offence if the fail to ensure their child “attends regularly” at school.
The law does not specify a length of time, although the Department of Education sets its bar for persistent truancy at 90 per cent.
New rules introduced in 2013 said absences should only be authorised by schools in “exceptional circumstances”, allowing fines to be imposed for anything judged to fall short of the benchmark.
Previous guidance allowed headteachers to grant up to a fortnight holiday in term-time each academic year for pupils with good attendance records.
The High Court ruling, which sets a legal precedent in England and Wales, was eagerly awaited by parents faced by huge price hikes in the school holidays.
Craig Langman, chairman of the Parents Want a Say campaign, which opposes the term-time holiday ban, called the court case “a pivotal moment”.
“It’s time we bring discretion and common sense back into the education system,” he said. “This nonsense has been going on for two years too long.”
The ruling came as a survey revealed families face paying more than double the price for a package holiday as soon as school holidays begin.
Research by travel money provider FairFX of package holidays said prices increased by up to 115 per cent for a family of four at a four star hotel in Tenerife, Majorca, the Costa del Sol and the Algarve.