The Suffolk Superior Court jury brought an end to deliberations after about 40 hours, the Boston Globe reported.
The newspaper said the courtroom was packed with Cahill's relatives and supporters, and his wife, Tina, began to cry when the deadlock was announced.
Cahill called the mistrial a "total vindication" of his assertion he acted in the interest of the state lottery, not in the interest of his unsuccessful 2010 independent run for governor, when he approved a $1.5 million lottery ad blitz.
The Globe said mistrial does not necessarily end the prosecution, and state Attorney General Martha Coakley will have to decide whether to retry him.
"It's a complicated process, and it's a complicated law," one juror, who would not identify himself by name, told reporters, the Globe said. "There was a lot of information. The hurdles you have to cross in order to prove it beyond a reasonable doubt -- for some people -- were not crossed."
Cahill and his former campaign manager Scott Campbell were charged with two counts of conspiracy under a 2009 state ethics law.
Wisconsin business offering 'therapeutic cuddling' forced to close
Blake Lively's Christmas wish would bankrupt Ryan Reynolds