Haslem's attorney, Eric Schwartzreich, told The Associated Press that he received a call with the decision Thursday afternoon.
"The State Attorney's Office will not be able to file charges," Assistant State Attorney Errol Portman wrote in what's known as a "no action" memo.
Haslem expressed relief that the situation was over.
"I am really looking forward to getting back to basketball and focusing on the upcoming season," Haslem said Thursday night in a statement released through the team.
Portman wrote that Haslem's fingerprints were not on the container of marijuana found in the vehicle, and as such, it couldn't be proven that Haslem was actually in possession of the contraband.
The Heat forward was arrested Aug. 15 after being clocked driving 78 mph in a 60 mph zone on the Gratigny Parkway in Miami-Dade County. A search of his 2008 Mercedes turned up marijuana, which passenger Antwan Fleming claimed ownership of when questioned by the Florida Highway Patrol.
Fleming's fingerprints were found on the container, Portman wrote.
"While there was probable cause for the arrest of Udonis Haslem [it was in the car driven by Udonis Haslem, the car belonged to Udonis Haslem, the cannabis was in the immediate vicinity of Udonis Haslem, etc.], the State could not prove Udonis Haslem's knowledge or possession of the cannabis beyond a reasonable doubt," Portman said.
The South Florida Sun-Sentinel first reported the case's dismissal.
Haslem was facing one third-degree felony count of marijuana possession and four misdemeanor counts of having drug paraphernalia. The felony charge could have carried maximum punishments of a $5,000 fine and a five-year prison sentence.
Haslem's 2008 Mercedes, valued at more than $100,000, was returned to him earlier this week after it was seized by FHP, Schwartzreich said.
Haslem likely will not face NBA sanctions.
"We love him, we have great respect for him, and we're going to let this run its course," Heat president Pat Riley said last week.
Haslem has spent all seven of his NBA seasons with the Heat, and the South Florida native signed a five-year contract to stay with the team earlier this summer. Haslem has averaged 10.0 points and 8.1 rebounds for Miami, and helped the Heat win the 2006 NBA championship.