The attorney general's office said it would take no action against retired general Salvador Cienfuegos, whose surprise arrest at a Los Angeles airport in October had sparked diplomatic tensions.

It said prosecutors had concluded that Cienfuegos "never had any meeting with the members of the criminal organization investigated by the US authorities.

"He did not have any communication with them, nor did he carry out acts intended to protect or help those individuals," it added.

Prosecutors said there was also no evidence that the retired general "had issued any order to favor" criminals or "obtained illegal income."

Cienfuegos was accused by the US of conspiring to produce and distribute "thousands of kilograms" of cocaine, heroin, methamphetamine and marijuana.

The retired general, nicknamed "The Godfather," had faced a possible life sentence in the US if convicted of the drug trafficking and money laundering charges, which he denied.

After diplomatic pressure from Mexico, the US Department of Justice unexpectedly asked a New York judge to release Cienfuegos so that Mexico could hold its own probe and potentially try him.

Mexico had said that its prosecutors would study the case file from the US Drug Enforcement Administration (DEA) before making a decision.

The indictment of Cienfuegos, a key figure in ex-president Enrique Pena Nieto's 2012 to 2018 government, surprised and irritated Mexican officials.

It triggered a diplomatic row that experts said could have jeopardized the countries' cooperation in fighting powerful cartels.

The arrest put Mexican President Andres Manuel Lopez Obrador in an uncomfortable position because he has close links to the military and has given it increased responsibilities.

Lopez Obrador, who has had cordial relations with outgoing US President Donald Trump, said after the US dropped the charges that his government "will not allow crimes to be fabricated."

He also underscored the importance of the "prestige" of the armed forces.

Experts had said after Cienfuegos was sent back that political interests and the military's power made it unlikely that he would ever stand trial at home.

Mexico has also asked the United States to extradite a former public security minister held in New York on allegations of taking huge bribes to allow the notorious Sinaloa cartel to smuggle drugs.

Genaro Garcia Luna, who was an architect of Mexico's war on drug trafficking, was detained in Texas in December 2019. He denies the charges.