Ledger died of an accidental prescription drug overdose in Manhattan in January. He was 28.

The insider also told the Daily News the status of the investigation means actress Mary-Kate Olsen won't be served with a subpoena, demanding she disclose any information she has about the prescription drugs Ledger had been using.

Olsen's masseuse reportedly called her before dialing 911 to request help for Ledger, whom the masseuse is said to have found unresponsive at Ledger's home.

"A decision was made to close the case," a source familiar with the case told the Daily News.

Although Ledger had prescriptions for the Xanax, Valium and Restoril found in his system, he apparently did not have any for the OxyContin or Vicodin he had been taking.

"We don't know where he got the other narcotics. No one interviewed suggested (Olsen) gave him the drugs," a second insider told the newspaper. "But (Olsen) may have known where the drugs came from."

Olsen's lawyer, Michael Miller, released a statement earlier this week, insisting the actress "had nothing whatsoever to do with the drugs found in Heath Ledger's home or his body, and she does not know where he obtained them."