"A decision has been taken to withdraw cases against Shamim in the Varanasi blast case.
"The district magistrate of Varanasi has been asked to approach the local court there in this connection," said a senior home department official.
The absconding Shamim, who was never arrested in the case, is accused of having planted a bomb, which remained unexploded, at Jamuna Fatak in Godaulia area at Dashashwamedh Ghat.
The bomb was recovered soon after twin blasts in the Sankatmochan temple and cantonment area of Varanasi on March 7, 2006, which killed 21 persons.
In 2008, following the Batla House encounter in New Delhi, one alleged Indian Mujahideen member was arrested who is said to have confessed to being involved in the planting of the unexploded bomb.