James Cooper has been found not guilty of the 2009 murder of Javed Mills but guilty of his manslaughter.
A jury returned the verdict this afternoon after a month-long trial at the High Court in Auckland.
Mr Mills' incomplete skeleton was found at a Mt Wellington property in September 2011 as demolition work was scheduled to begin.
Cooper, his former flatmate, was charged with murdering the 25-year-old last year.
Cooper, also 25, did not dispute his involvement in the death and pleaded guilty to covering it up, but denied murder and claimed he killed Mr Mills accidentally in self-defence.
The trial was told Cooper posed as his victim, sending messages to Mr Mills' family and friends via social networking site Bebo to lead them to believe he had moved to Wellington to start a new life.
He also used Mr Mills' eftpos card, withdrawing his Winz benefit each week and spending the money, the Crown said.
Defence lawyer Mina Wharepouri told the jury Mr Mills' death was a tragic and unforeseen accident. He argued Cooper's actions after the death were "cowardly'', but that did not make him guilty of murder.
Outside court Cooper's lawyer Mina Wharepouri said the manslaughter verdict was "simply a reflection that it's a tragedy for everybody involved''.
"At the end of the day, Mr Cooper feels very sorry for his actions and he understands that his attempt to conceal the fact of Mr Mills' death has had a devastating effect on Mr Mills' family.
"We walk away from here very, very sensitive to their plight.''
The outcome was the best Cooper's legal team could have hoped for in the circumstances, Mr Wharepouri said.
Cooper was very apologetic for his actions and "simply acted at that point in time with panic''.
"Now that he's able to calmly reflect he knows full well what he should have done and he regrets what he did.''
The officer in charge of the police investigation, Detective Sergeant Kevin Hooper, said Mr Mills' family understood and accepted the jury's verdict.
"Their initial reaction was sadness at the loss of Javed, but they did go further and tell me that they understood that the verdict was totally in the hands of the jury and they totally accept that.''
The family also expressed relief that the five-week trial was over, Mr Hooper said.
Cooper is due to be sentenced in October.