The six-man, six-woman jury reached the verdict on the sixth day of deliberations following a four-week trial.
Steinle was fatally shot in the back in 2015, and although Zarate didn't deny shooting Steinle, he said it was an accident.
Jose Ines Garcia Zarate, who had previously been deported multiple times, was found not guilty of murder.
A large photo of Kate Steinle is shown while her dad Jim Steinle testifies during a Senate Judiciary Committee hearing on Capitol Hill, July 21, 2015 in Washington, DC. The defense argued that the shooting was unintentional, that the defendant found the gun wrapped in a cloth under his seat at the pier and that it accidentally discharged.
Before the shooting, the San Francisco sheriff's department had released him from jail despite a federal immigration request to detain him for deportation.
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Kris continued to say that having and watching her grandkids is her " most awesome journey" and the true meaning of her life.
Since taking office, President Donald Trump's administration has tightened immigration enforcement and warned sanctuary cities they could lose funding if they refuse to cooperate with federal authorities.
Several months after Steinle's death, Trump claimed that she had been shot five times.
President Trump later signed an executive order to cut funding from cities that limit cooperation with US immigration authorities, a policy that a federal judge in San Francisco permanently blocked Monday.
The case became a lightning rod for Trump and others in the push to halt illegal immigration and penalize so-called sanctuary cities, including San Francisco. "He took the life of a young, vibrant, beautiful, cherished woman by the name of Kate Steinle", she said. Instead of deporting him, federal authorities sent him to San Francisco on a 20-year-old drug warrant for a small amount of marijuana. "San Francisco's decision to protect criminal aliens led to the preventable and heartbreaking death of Kate Steinle".
Languishing in seventh behind his Republican competitors at the time, just two weeks into his campaign, Trump used Garcia Zarate's past-he had been deported from the US five times and had seven felony convictions, including drug charges-as proof of his campaign's anti-immigrant operating thesis.
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It's alleged Mr Bairstow headbutted Mr Bancroft, before Bancroft was selected for the test team and was playing for WA. It's understood the incident was raised on the field during the Ashes opener in Brisbane .
But he told jurors that Garcia Zarate had no motivation to kill Steinle and that as terrible as her death was, "nothing you do is going to fix that".
Prosecutors said Garcia Zarate was playing his own "secret version of Russian roulette" and deliberately fired into an unsuspecting crowd on the pier, killing Steinle.
Trump also mentioned Steinle in his acceptance speech at the Republican National Convention after winning the Republican presidential nomination.
Known as Kate, she was walking along the pier when she was struck by a bullet and died in her father's arms.
In June, the House of Representatives passed "Kate's Law", a measure named for the victim that would increase maximum prison penalties for immigrants caught repeatedly entering the United States illegally.
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Chelsea Clinton, the daughter of Bill and Hillary Clinton, tweeted her support too. This is not the first time Clinton has come to the aide of a president's child.