A spokesperson said the Russian vessel is no longer a threat to the safety of offshore oil platforms, its personnel, or the marine environment.
It is unlikely that it will re-enter Canadian waters, given the current patterns and predominant winds.
According to Transport Canada, the vessel was spotted approximately 250 nautical miles east of St. John’s, approximately 50 nautical miles outside Canada’s territorial waters.
The fate of the Lyubov Orlova remains unclear.
Transport Canada said in a release Saturday night that they have decided not to pursue the vessel because it would be a safety risk to the Canadian sailors.
The department said the owners of the vessel have been made aware of the current status of the ship and they are responsible for it.
The Lyubov Orlova had been tied up in the St. John's harbour for more than two years before it was towed away last week.
The derelict vessel started drifting toward open water after it snapped its tow line as a tugboat was pulling it to the Dominican Republic for scrap.