WASHINGTON (CNN) -- Former Republican Sen. Ted Stevens of Alaska has been "cleared" by the Justice Department's request to dismiss his federal corruption convictions and drop all charges against him, his lawyer said Wednesday.

Former Sen. Ted Stevens, 85, of Alaska lost his re-election bid in November.

 Prosecutors accused Stevens of failing to disclose thousands of dollars in free work from an oilfield services company in his home state of Alaska on Senate ethics forms. But in December, an unnamed FBI whistle-blower accused prosecutors of withholding evidence from the defense, and the Justice Department asked a judge to dismiss the charges against Stevens on Wednesday.

"His name is cleared," Stevens' lawyer, Brendan Sullivan, told reporters. "He is innocent of the charges, as if they'd never been brought."

Stevens, 85, had represented Alaska in the Senate since 1968. He lost his bid for a seventh full term in November after his conviction on seven counts of lying on Senate ethics forms.

In a statement issued Wednesday morning, he thanked the Justice Department and Attorney General Eric Holder for requesting the charges be dropped.

"I always knew that there would be a day when the cloud that surrounded me would be removed," Stevens said. "That day has finally come."

U.S. District Judge Emmet Sullivan has set a Tuesday hearing on the Justice Department's request. Sullivan excoriated prosecutors during Stevens' trial and held the prosecution in contempt at one point.

In December, two months after Stevens' trial, the whistle-blower alleged that prosecutors had withheld some evidence from the defense team and that someone with the government had had an inappropriate relationship with Bill Allen, an oil industry executive who was the government's key witness. And in the motion it filed Wednesday, the Justice Department acknowledged that Stevens was not given access to notes taken by prosecutors during an April 2008 interview with Allen, the former chairman of an oilfield services company at the center of a corruption probe in Alaska.

The notes show that responses by Allen, the prosecution's star witness, were inconsistent with testimony he gave against Stevens, and that information from the interview could have benefited Stevens at trial, the motion says.

"In light of this conclusion, and in consideration of the totality of the circumstances of this particular case, I have determined that it is in the interest of justice to dismiss the indictment and not proceed with a new trial," Holder said in a written statement.

Brendan Sullivan said the "extraordinary evidence of government corruption" forced the government to drop the case.

"Not only did the government fail to provide evidence to the defense that the law requires them to provide, but they created false testimony that they gave us and actually presented false testimony in the courtroom," he said.

The Justice Department's Office of Professional Responsibility will review the prosecution team's conduct in Stevens' case, Holder said. Asked whether the prosecutors should be charged themselves, Sullivan told reporters, "That is not my job. I'm a defense lawyer."

During the trial, Assistant Attorney General Matthew Friedrich said Stevens hid "hundreds of thousands of dollars of freebies" he received from Allen's company, VECO, and from Allen himself. Many of the allegedly free services were given as part of the renovation of Stevens' Alaska home, prosecutors said.