Relatives of Jean Charles de Menezes have been told that police officers involved in the fatal shooting will not face punishment.
Solicitors acting on their behalf had called on the Independent Police Complaints Commission (IPCC) to reconsider if disciplinary action is necessary.
The family of the 27-year-old Brazilian said fresh evidence about the circumstances of his death at Stockwell Tube station, in south London, emerged at an inquest last year.
Mr de Menezes was shot dead on June 22, 2005 by Scotland Yard firearms officers who mistook him for wanted failed suicide bomber Hussain Osman.
The IPCC decision follows a review of the mass of evidence and paperwork created by the three-month inquest last year.
A similar move was made by officials at the Crown Prosecution Service (CPS) who reconsidered whether criminal charges could be brought.
An IPCC spokesman said: "The IPCC has today (Friday) advised lawyers acting for Jean Charles de Menezes' family, the Metropolitan Police and the Metropolitan Police Authority that it will stand by its decision not to recommend disciplinary actions against the officers involved in the fatal shooting of Mr de Menezes in July 2005.
"The IPCC had reviewed its original decision in the light of the inquest into Mr de Menezes' death which concluded in December 2008.
"The review was undertaken at the request of Mr de Menezes' family and followed a review by the Crown Prosecution Service of its own decisions after the inquest.
"In making this decision, the IPCC has carefully considered the family's representations, the evidence identified by its own investigation and all subsequent legal proceedings."
