Corey Lewandowski had been charged with simple battery after reporter Michelle Fields said he forcibly grabbed her arm on 8 March.
State prosecutors determined there was not enough evidence to convict him.
Mr Lewandowski, supported by Mr Trump, accused Ms Fields of exaggerating the event and changing her story.
"Our perception is reality, her perception is that she was almost thrown to the ground," said Brad Cohen, Mr Lewandowski's lawyer.
Police in Florida had charged Mr Lewandowski after Ms Fields filed a criminal complaint.
"Although there was probable cause to make an arrest, the evidence cannot prove all legally required elements of the crime alleged and is insufficient to support a criminal prosecution," prosecutor Dave Aronberg said.
The announcement comes days before the New York state primary, which will be crucial to Mr Trump's campaign for the Republican presidential nomination. Mr Trump currently leads the race.
Investigators did concede that Mr Lewandowski "pulled Ms Fields back" when she tried to interview Mr Trump, but said he could have thought she was "making unwanted physical contact" with him.
"While the facts support the allegation that Mr. Lewandowski did grab Ms Fields' arm against her will, Mr Lewandowski has a reasonable hypothesis of innocence," Mr Aronberg said
The Trump campaign said in a statement that Mr Lewandowski is "gratified" by the prosecutor's decision.
He "appreciates the thoughtful consideration and professionalism by the Palm Beach State Attorney and his staff who carefully reviewed this matter, as well as Mr. Trump's loyalty and the support of his colleagues and family during this time, the statement reads. "The matter is now concluded."
Ms Fields tweeted that the office of the prosecutor asked her if she would accept an apology from Mr Lewandowski, to which she said yes, but that she has not heard back about it.
Ms Fields quit her job at conservative news site Breitbart following the event, saying that they did not defend her in the aftermath of the event.
Security video released by Mr Trump appears to show him trying to pull Ms Fields out of the way as she walks alongside Mr Trump and tries to speak to him following an event at his Mar-a-Lago resort in Florida.
A Washington Post reporter corroborated Ms Fields' claim that Mr Lewandowski forcibly grabbed her and she tweeted a photo of her bruise.
Both Mr Trump and Mr Lewandowski accused her of lying, which she repeatedly denied.
Mr Trump rejected calls to fire Mr Lewandowski and told him "good job" at a press conference shortly after the incident.
A Florida prosecutor has decided not to pursue criminal charges against Donald Trump's campaign manager who was accused of tussling with a reporter.