Mr LaBeouf was arrested following a confrontation at his live-streamed video project in New York, and was charged with assault and harassment.
Those charges have now been dropped.
A spokeswoman for the district attorney in New York's Queen's district told US media the case would be dismissed because of insufficient evidence.
Mr LaBeouf's art project, a 24-hour live stream called He Will Not Divide Us, encouraged members of the public to say those words into a camera outside New York's Museum of the Moving Image.
But Mr LaBeouf and a member of the public allegedly entered an altercation during a live broadcast in January.  The museum later said the site had become "a flashpoint for violence".
The live stream was planned to continue for the four years of Mr Trump's presidency, but the museum pulled support for the project in early February.
The project was forced to move location twice in the US, after opponents tried to disrupt it.
It then arrived in a new form in Liverpool in the UK - but faced similar problems.
Liverpool's Fact arts centre had been live-streaming a flag with the words, but cancelled the project after people climbed on the roof to try and remove the flag.
In addition to his performance art, LaBeouf is best known for films like Transformers, Indiana Jones and the Kingdom of the Crystal Skull and Wall Street: Money Never Sleeps.
Actor-turned-artist Shia LaBeouf will no longer face assault charges over a January incident at his anti-Donald Trump art installation.