The Russian Investigative Committee said the criminal case has been closed because the charges brought against the doctor have been decriminalized, RIA Novosti reported.
Magnitsky, who died in November 2009 after more than a year in the Matrosskaya Tishina pretrial detention center, had been arrested on tax evasion charges days after accusing police investigators in an alleged $230 million tax refund fraud.
Vladimir Markin, an Investigative Committee spokesman, said the committee had decided to "stop the criminal prosecution of laboratory doctor Larisa Litvinova," who had been been charged with negligence contributing to Magnitsky's death.
Magnitsky, who was 37, had been outside counsel for the British fund Hermitage Capital Management when he uncovered the alleged tax fraud.
Earlier Monday, RIA Novosti said, Hermitage Capital reported Litvinova's case was closed because the statute of limitations had expired.
Prison officials said Magnitsky, who had been diagnosed with pancreatitis and gall bladder disease, died due to heart failure and toxic shock.
After his death, Hermitage Capital said, Litvinova was promoted and transferred to the Federal Penitentiary Service in Moscow.
Another prison doctor, Dmitry Kratov, is the sole official still facing charges in Magnitsky's death. He could be jailed five years if found guilty.
The U.S. State Department banned officials connected to Magnitsky's prosecutions from entering the United States.