"At the end of the investigation... It has not been demonstrated that Mr Yasser Arafat was murdered by polonium-210 poisoning," the three judges ruled, according to a statement from the prosecutor from the court in Nanterre near Paris told AFP.
Arafat died in Percy military hospital near Paris aged 75 in November 2004 after developing stomach pains while at his headquarters in the West Bank city of Ramallah.
His widow Suha has maintained he was poisoned, possibly by highly radioactive polonium.
Suha's lawyer, Francis Szpiner, also announced the judges' decision on Twitter.
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She filed the murder case in 2012 at the Nanterre court. The same year, Arafat's tomb in Ramallah was opened for a few hours to allow three teams of French, Swiss and Russian investigators to collect around 60 samples.
Three French judges concluded their investigations in April and sent their findings to the Nanterre prosecutor, who recommended in July that the case be dropped.
It stopped short of saying that he had been poisoned by the substance.
French experts found that the isotopes polonium-210 and lead-210, found in Arafat's grave and in the samples, were of "an environmental nature," Nanterre prosecutor Catherine Denis said in April.
Lawyers for Arafat's widow accused the judges of closing the investigation too quickly and called for more experts to be questioned.