On October 18, the 34-year-old was repatriated to Colombia in critical condition after the submarine he was traveling in was bombed.
President Donald Trump claimed, without providing proof, that the vessel was loaded with fentanyl and other drugs.
Two people onboard were killed and two others -- the Colombian and an Ecuadoran national -- were detained and handed over to their countries.
The Colombian survivor was admitted to a Bogota hospital suffering from brain trauma.
Interior Minister Armando Benedetti had stated that upon his recovery, he would be "prosecuted" by the justice system as a "criminal."
However, a source from the prosecutor's office told AFP on Tuesday that he "was never detained" after being discharged from hospital on October 22.
The judicial source said authorities were still investigating whether the man had links to drug trafficking networks.
The Ecuadoran survivor was also released without charge in his country.
So-called narco submarines -- in reality, vessels that are only partly submerged in the water -- have for years been used to ferry cocaine from South America, particularly Colombia, to Central America or Mexico, usually via the Pacific Ocean.
Washington has sanctioned Colombia's left-wing President Gustavo Petro, a fierce critic of Trump's military campaign against Latin American drug traffickers, for allegedly allowing drug cartels to flourish.
Petro rejects the US allegations.
At least 67 people have been killed in US strikes on alleged drug smugglers in the Caribbean and Pacific since early September.
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