Ecuador's decision to grant Assange political asylum in its embassy in London almost five years ago, shielding him from extradition, Ny said, had also made it impossible for her to formally notify the Australian of the charges against him.
Mr Assange said he had spent seven years either under house arrest or living inside the embassy, without charge, as he faced sex-related allegations in Sweden, which he has always denied.
He is wanted by British police for breaching bail conditions - and WikiLeaks is concerned this could result in him being extradited to the U.S., where he would face prosecution for publishing swathes of classified military and diplomatic documents.
Marianne Ny, Sweden's director of public prosecution, said in a statement that the rape investigation was dropped because "there is no reason to believe that the decision to surrender him to Sweden can be executed in the foreseeable future".
August 13: Swedish prosecutors drop investigations into some allegations against Assange because of the statute of limitations; investigation into a rape allegation remains active.
Ecuador urged Britain Friday to "grant safe passage" out of the country to WikiLeaks founder Julian Assange after Sweden dropped a warrant that drove him to take refuge in Ecuador's London embassy. Nevertheless, he assured that he does not forgive or forget.
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Assange added that WikiLeaks would continue regardless of "the threats towards me and my staff" before hailing the release of Chelsea Manning, the former Army intelligence analyst who provided classified information to WikiLeaks in 2010.
Barry Pollack, an attorney in Washington representing Assange, said the British should allow Assange to travel to Ecuador.
Assange's Twitter feed had a picture of him smiling and looking relaxed posted on Friday morning.
"It is a scandal that a suspected rapist can avoid the judicial system and thus avoid a trial in court... a decision to drop the case won't make her change [her assertion] that Assange exposed her to rape."
The preliminary investigation against Julian Assange for rape (lesser degree) is to be discontinued.
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Deputy Attorney General Rod Rosenstein said he made this decision out of the enormous "public interest" in this investigation. And then there was the story that he had tried to stop the FBI investigation into his former national security adviser.
On December 7, Assange was arrested by London police after turning himself in.
"This is a matter that's gone beyond anything I'm aware of", Sessions said at the time.
Mr Assange's Swedish lawyer, Per Samuelson, said the prosecutor's decision on Friday represented "a total victory" for his client.
The British government declined to comment on speculation that the United States may already have requested Assange's extradition. "Focus now moves to United Kingdom", the group tweeted.
But it added that Assange is now wanted for a "much less serious offense" than the original sex crimes claims, and police "will provide a level of resourcing which is proportionate to that offense". He nonetheless faces arrest if he leaves the embassy grounds.
WikiLeaks played a central role in the 2016 presidential race when it published e-mails stolen through hacking the Democratic National Committee and later from Mr John Podesta, chairman of Mrs Hillary Clinton's campaign. She was freed Wednesday, having had her sentence commuted by outgoing President Barack Obama before he left office.
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Striking a defiant stance, he added: "You can't let the critics and the naysayers get in the way of your dreams". He said he would give the Federal Bureau of Investigation a week and then "if we need a subpoena, we'll do it".