The announcement means the outspoken WikiLeaks leader no longer faces sex crime allegations in Sweden, although British police say he is still wanted for jumping bail in Britain in 2012.
It does not clear Assange's name, however, and some experts say it puts him into an even more precarious legal situation if the US has as some suspect a sealed indictment for his arrest.
Assange, 45, took refuge in Ecuador's embassy in London in 2012 to escape extradition to Sweden to answer questions about sex-crime allegations from two women. He has been there ever since, fearing that if he was in custody he might ultimately be extradited to the United States for his role at the helm of WikiLeaks, which has enraged governments around the world by publishing tens of thousands of leaked classified US documents.
"The truth is, he gave a very good explanation: this was consensual sex between two adults and nothing else. And he's a free man," Samuelson said.
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"He's an innocent man and this case has been closed," he said, adding that Assange was "very unhappy" about the long inquiry, which he said cost Assange "five, six years of his life."
British officials said they do not comment on individual cases. British Prime Minister Theresa May said "any decision that is taken about U.K. Action in relation to him (Assange) would be an operational matter for the police."
US President Donald Trump said last month he would support any decision by the Justice Department to charge Assange.
WikiLeaks tweeted after the Swedish announcement: "UK refuses to confirm or deny whether it has already received a US extradition warrant for Julian Assange. Focus now moves to UK."
Lawyer David Allen Green, who has followed the case, tweeted: "Once outside embassy, Assange more at risk from any U.S extradition attempt than if he had gone to Sweden."
At a press conference today in Stockholm, Marianne Ny, chief of the Swedish Prosecution Authority, said she "has decided to discontinue the investigation" and call back the European arrest warrant for Assange.
The allegations surfaced after two women accused Assange of sexual misconduct during a visit to Stockholm in 2010.
Prosecutors were trying to determine, among other things, if Assange had sex with the woman while she was asleep and without using a condom.
Assange has said that all the sex was consensual.
Ny told reporters that prosecutors had been unable to make a full assessment of the case and were not making a finding on whether Assange was guilty or innocent of the allegations.
She said the WikiLeaks founder had "tried to dodge all attempts at arrest" by British and Swedish authorities. She said the case could be reopened if Assange returns to Sweden before the statute of limitations expires in 2020.
A lawyer for the woman who alleged she was raped by Assange said "it's a scandal that a suspected rapist can avoid the judicial system and thus avoid a trial in court."
Elisabeth Massi Fritz says her client is shocked by the Swedish decision but added that "she can't change her view that Assange has exposed her to a rape."
British police said despite Sweden's decision to drop a rape investigation, Assange still faces arrest if he leaves Ecuador's embassy in London. The Metropolitan Police says there's a British warrant for Assange's arrest after he jumped bail in 2012.
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