However the Crown Prosecution Service said that London's Metropolitan Police should be prosecuted under health and safety laws for the killing of Jean Charles de Menezes.
The announcement takes the pressure off Metropolitan Police Commissioner Sir Ian Blair, Britain's top police officer, who has faced calls to resign since the 27-year-old electrician was shot seven times in the head on a London Underground train.
Mr De Menezes was shot at Stockwell Underground train station in south London a day after an alleged failed attempt to replicate the suicide attacks on the British capital's public transport system on July 7, 2005, in which 56 people died, including the four bombers.
Relatives outraged
Relatives of the victim who have sought charges against the officers involved expressed outrage at the decision as they sought the support of a Brazilian government delegation visiting London.
"I am very disappointed. I was expecting a negative reply and it is shameful," a cousin of the victim, Patricia da Silva Armani, said.
The CPS said that in order to successfully prosecute the two officers who fired the fatal shots, it would have to prove they did so without actually believing that he was a suicide bomber.
In a statement read by its senior lawyer Stephen O'Doherty, the CPS said the officers appeared to have acted in good faith.
Though "a number of individuals had made errors in planning and communication" that led up to the tragedy, there was "insufficient evidence" to prosecute any police officers.
"The two officers who fired the fatal shots did so because they thought that Mr de Menezes had been identified to them as a suicide bomber and that, if they did not shoot him, he would blow up the train, killing many people."
But the CPS said it had evidence to prosecute the office of the Metropolitan Police Commissioner under sections 3 and 33 of the Health and Safety at Work Act 1974 for failing to provide for the health, safety and welfare of Mr De Menezes.
A successful health and safety prosecution would mean an unlimited fine on the police authority.
The Metropolitan Police said that although it was pleased no officers would be charged, it was "concerned and clearly disappointed" at the decision to prosecute the force for safety breaches.