A verdict to remove Sharif would have left his party in power but would, nevertheless, have sparked turmoil at a time when Pakistan is experiencing modest growth and improved security after years of violence, and the civilian government and powerful military have appeared to come to uneasy terms.
Two of five judges on the court bench recommended that Sharif should step down but they were outvoted.
The court ordered a joint investigation team be formed to look into allegations around Sharif's children using offshore companies to buy properties in London.
Sharif and his children deny any wrongdoing.
Police in riot gear surrounded the court in the capital, Islamabad, as it delivered its verdict and some protesters urged Sharif to step down with shouts of "Go Nawaz, Go Nawaz."
The Supreme Court agreed last year to investigate the Sharif family's offshore wealth after opposition leader Imran Khan threatened street protests following the leaking of the "Panama Papers."
Sharif told parliament last year that his family wealth was acquired legally.