(CNN) -- An Alabama judge on Thursday abruptly dismissed the murder case against a man accused in the scuba-diving death of his newlywed wife off Australia's coast.
The decision from Judge Tommy Nail came near the end of the second full week of David Gabriel "Gabe" Watson's trial in Birmingham.
According to Ken Glass, the judge's judicial assistant, Nail dismissed the case "after the state rested its case against Gabe Watson (and) the defense filed a motion for a judgment of acquittal due to a lack of evidence."
"I'm going to grant the defendant's motion for acquittal. This case is dismissed," Nail said, prompting an outburst of applause in the courtroom.
Afterward, a visibly emotional Watson put his face in his hands, then began hugging people around the room.
His 26-year-old wife, Tina, died October 22, 2003, while the pair were diving at a historic shipwreck off the Great Barrier Reef -- some 9,000 miles from Birmingham, where the two had wed 11 days earlier.
His father, David Watson, called the entire situation "terrible, it's tragic," while expressing satisfaction with the judge's decision.
"I'm just thrilled for Gabe, and I just hope everybody can begin to heal, get their lives back together," said David Watson, calling his son a "good kid."
Prosecutor Don Valeska said "this case is over forever," since there is no appeal possible.
"I strongly disagree with him," Valeska said of Nail. "I'm just extremely stunned, and I'm at a loss for words."
That sentiment was echoed by Tommy Thomas, Tina's father, who said "we're very disappointed" by Nail's decision.
"There just seems to be a lot more protection for the accused than there does consideration for the victim, which in this case was Tina," Thomas said.
After his wife's death, Watson returned from Australia -- where media dubbed him "The Honeymoon Killer" -- to the United States and remarried five years later.
That same year, in 2008, he pleaded guilty in Australia to criminally negligent manslaughter and subsequently served 18 months in prison in that country.
In October 2010, an Alabama grand jury indicted Watson on two counts -- murder for pecuniary gain and kidnapping where a felony occurred. Those charges were based on the premise that Watson hatched the plot to kill his wife while in Alabama.
The doctrine of double jeopardy -- which says that a person cannot be tried or punished twice for the same crime -- did not apply because two separate sovereigns, a state government and a foreign government, were seeking to prosecute, said John Lentine, a Birmingham criminal defense attorney and law school professor.
After his sentence was complete, the Australian government held Watson for a short time in immigration detention in light of its policy of not extraditing anyone who might face the death penalty.
Australian authorities deported him back to the United States after getting assurance from U.S. authorities that "the death penalty would not be sought, imposed or carried out," said Sandi Logan, a spokesman for the Australian Department of Immigration and Citizenship. Watson was then arrested, in November 2010, in Los Angeles.
In the opening arguments of Watson's U.S. trial earlier this month, Assistant Attorney General Andrew Arrington told jurors that Watson had changed his story on what happened several times. The prosecution also alleged that Watson had expected to gain about $210,000 in insurance and death benefits due to his new wife's death.
"This whole case ... is about murder and gain," Arrington said.
But defense attorney Brett Bloomston said that Tina's father was the beneficiary on her workplace insurance policy. Watson filed for some expenses from a travel policy, but it was denied on a technicality, Bloomston said. His client did sue an insurance company when it denied him an accidental death benefit, the attorney said.
"Gabe never stood to gain anything from Tina's death; he lost," said Bloomston.
The defense argued that Tina Watson was wearing too much weight with her suit when she died, and that a strong current, her relative diving inexperience and a pattern of anxiety during dives were contributing factors.
During the trial, Judge Nail spelled out what he believed were the basics of the prosecution's case -- that Gabe Watson had schemed in Alabama to kill his new wife.
"The defendant buys an engagement ring. He gives it to his future bride. He marries her. He plans a trip halfway around the world that's paid for by him or his family," Nail said. "And he did all of that, and planned it all here, so he could go over there and kill her so he could get the same engagement ring he purchased?"
After Thursday's decision, Bloomston called the entire ordeal a "nightmare for Gabe and his family (and) a nightmare for Tina and her family."
"We all wanted justice, we all wanted the court to hear what little information was presented, and the judge determined that it wasn't enough," the lawyer told reporters outside the court. "We're just very, very happy that Gabe can get some closure and move on, start his life over."
Amanda Phillips, a friend of Tina Watson, said outside the court that she wanted the jury to decide the case and feels that the "only justice that comes is the one that God provides, and we will never be there for that day."
"(Watson) knows everything that happened, he knows how it went down, he knows what was involved, he knows what the intent was, he knows what the feelings were, the motives were," she said. "He doesn't need to have a jury tell him what happened."
CNN's Rick Martin contributed to this report.