Greater Manchester Police have informed Liverpool they will not be taking any action against Steve Finnan following allegations that he racially abused Manchester United defender Patrice Evra.
The incident being investigated followed complaints by lip-readers watching the televised Premiership clash at Old Trafford on January 22.
The Liverpool defender vehemently denied the accusations and video evidence sanctioned by the Anfield club supported that view and now the police have dropped the case.
A Liverpool spokesman said: 'Obviously we welcome the news. Our own analysis of the television footage proved there was no evidence to back up these claims.
'It's very unfortunate that Steve's good name has been dragged through the mud in the meantime and we are glad this matter has now been resolved.'