The Senate Ethics Committee still has an active investigation into allegations that Ensign covered up an affair with Cindy Hampton. Her husband, Doug, was a longtime Ensign friend and his former administrative assistant.
Ensign told the Las Vegas Review-Journal Wednesday his lawyers were told by the Justice Department that the federal investigation was over.
"Obviously this is great news for us," Ensign said. "It's a pretty nice early Christmas present."
The Federal Election Commission dropped a complaint last month. Ensign was alleged to have paid the Hamptons $96,000 in campaign funds to ensure their silence about the affair.
Ensign has already said he plans to run for a third term in 2012.
Melanie Sloan, executive director for Citizens for Responsibility and Ethics in Washington, charged that the Justice Department had the witnesses it needed to pursue a case against Ensign.
"It is a sad day for America when the Department of Justice declines to take action against a senator who has violated the law as blatantly as Sen. Ensign," she said.