Britain's Crown Prosecution Service
said there was "insufficient evidence to prosecute" Richard on sex abuse accusations made by four men dating from between 1958 and 1983.
Richard, 75, welcomed the news. He has always maintained his innocence.
"I am obviously thrilled that the vile accusations and the resulting investigation have finally been brought to a close," the entertainer said in a statement on his website
The Crown Prosecution Service decides whether it is appropriate to present charges for a criminal court to consider. It had been studying police evidence since May.
The decision puts an end to a case highly publicized by the BBC
, Britain's national broadcaster.
South Yorkshire police searched Richard's home
in Sunningdale, Berkshire, in August 2014 as part of an investigation into the alleged offenses.
The BBC was present before the raid, drawing criticism that police had tipped off journalists.
"I was named before I was even interviewed and for me that was like being hung out like 'live bait,' " Richard said in the statement on his site.
"It is obvious that such strategies simply increase the risk of attracting spurious claims which not only tie up police resources and waste public funds, but they forever tarnish the reputations of innocent people."
Police issued an apology Thursday
following the prosecutors' announcement.
"The force (apologizes) wholeheartedly for the additional anxiety caused by our initial handling of the media interest in this case," a statement said, adding the force had learned from the case and had carried out a review of what happened.
"The investigation, which has spanned two years, is estimated to have cost in the region of £800,000 ($1.1 million), including staffing costs," it said.
Richard -- born Harry Rodger Webb -- has sold more than 250 million records in a career that began in the 1950s. His first No. 1 hit in the UK was in 1959 with "Living Doll."
Richard was knighted in 1995.