The Football Association said Mark Clattenburg had no case to answer after being accused by Chelsea midfielder Ramires of saying "shut up you monkey" to Mikel during an Oct. 28 match against Manchester United at Stamford Bridge. London police had already dropped their inquiries into the case because of a lack of evidence.
"To know you were innocent of something but that there was the opportunity for it to wreck your career was truly frightening," said Clattenburg, who is free to resume his career, having not refereed a match since the incident.
The FA said it believes the accusations were made by Ramires "in good faith," adding: "It is entirely possible for a witness to be genuinely mistaken and convincing in his belief."
Chelsea said it accepted the FA's judgment and welcomed the fact the governing body "recognizes the club and players were correct in reporting the matter."
The English game has been blighted by incidents of racial abuse over the past, with Chelsea defender John Terry and Liverpool striker Luis Suarez banned for four and eight matches, respectively, for hurling slurs at opponents during matches.
The yearlong Terry case, in particular, was especially damaging, with the fallout leading to his international retirement, the resignation of England coach Fabio Capello and question marks being raised about the desire and ability of football authorities to deal with racism.
The FA was keen not to let the Clattenburg case run and run, quickly opening an investigation and interviewing Mikel, Ramires, Clattenburg and his fellow officials in the match, which was broadcast live to a global audience. The FA also viewed unbroadcast television footage supplied by Chelsea.
"Three other witnesses, i.e. the other match officials, to whom everything said by referee was relayed via their communication equipment, are adamant the alleged words were not uttered," the FA statement read.
According to the FA statement, Mikel did not hear what Ramires claimed Clattenburg said. Both the Chelsea players are black — Mikel is from Nigeria and Ramires from Brazil.
The stormy match saw Clattenburg give red cards to two Chelsea players and United score a controversial winning goal by Javier Hernandez in a 3-2 victory. The defeat began a spiral of poor results that contributed to Roberto Di Matteo being sacked on Wednesday, and replaced by Rafael Benitez.
Separately, Mikel was charged Thursday with misconduct by the FA for "threatening and/or abusive and/or insulting words and/or behaviour" after the game, when he reportedly went into the referee's changing room to confront Clattenburg. Mikel has until Nov. 30 to respond to the charge.
Clattenburg is one of the FIFA candidates to referee at the 2014 World Cup in Brazil.
"I am looking forward to putting this behind me and concentrating on refereeing in the Premier League and other competitions," he said.
"I know first-hand the ramifications of allegations of this nature being placed into the public domain ahead of a formal process and investigation. I hope no referee has to go through this in the future."
AP Sports Writer Chris Lehourites contributed to this report.