The announcement came Tuesday, some six months after the U.S. Supreme Court tossed the now-diminished firm's 2002 conviction on obstruction of justice charges related to the Enron case, the Houston Chronicle reported Wednesday.
Andersen's indictment decimated its client base.
"The government has determined that it is in the interests of justice not to re-prosecute Andersen," federal prosecutors wrote in a four-page motion filed with the 5th U.S. Court of Appeals.
Although the legal cloud over Andersen has been lifted, it is a radically diminished entity, with just 200 employees whose primary purpose is to fight shareholder lawsuits related to the Enron case.
"This brings the curtain down on a sad, tragic period in American jurisprudence," said Houston lawyer Rusty Hardin said. "Andersen is a classic case of the dangers of rushing to judgment. Everyone piled on Andersen. Once they were indicted, they were dead. They didn't commit a crime."