The charge, which stemmed from an early morning incident on Dec. 30, was withdrawn because there was no reasonable prospect of conviction, prosecutors said in a brief court appearance.
Bieber was charged with one count of assault after he and five others were picked up by a limousine at a Toronto nightclub. Police alleged one of the passengers hit the limousine driver during an altercation.
"The Crown would be required to prove that an intentional application of force occurred, as well as who applied that force," prosecutor David Mitchell told the court.
"There were a number of people in the vehicle seated behind the driver at the time of the incident, and the Crown is not in a position to establish the identification of the person who came into contact with the complainant beyond a reasonable doubt based on the evidence available."
The singer's lawyer, Brian Greenspan, said police did their job in investigating the complaint and the Crown made the right decision based on the resulting evidence.
"This is an example of the system working effectively and properly," he said.
"(Bieber) is obviously relieved and obviously looks forward to being advised... that he can go forward and move along without this in his life."
Neither Bieber nor his supporters were in court Monday, though hordes of screaming fans braved frigid weather to await his arrival when he turned himself in to police in January. Some also showed up for previous court hearings hoping to catch a glimpse of the singer, who was not present.
It is one of a series of legal troubles faced by the 20-year-old star.
On Aug. 29, Bieber was arrested and charged with dangerous driving and assault following a collision between a minivan and an ATV in a rural area northeast of Bieber's hometown of Stratford, Ont.
The driver of the ATV and an occupant of the minivan "engaged in a physical altercation,'' according to police.
A hearing on those charges has been scheduled for Sept. 29.
Greenspan would not discuss the Stratford charges but said he hoped to see the same outcome in that case.
The singer has also had run-ins with the law in the United States.
Bieber was arrested in Florida in January after what police alleged was an illegal street race involving the pop star and his friend.
In August, Bieber pleaded guilty to charges of careless driving and resisting arrest in that case and in a plea bargain was sentenced to an anger management course, a $500 fine and a $50,000 charitable contribution.
In July, Bieber pleaded no contest to a misdemeanour vandalism charge and was ordered to pay nearly $81,000 in damages and to serve two years probation following an egg-tossing incident which caused damage to a neighbour's home in Calabasas, Calif.
The singer was also ordered to complete five days of community labour and a 12-week anger-management program and to stay away from the victim and his family for two years. Bieber has since moved from Calabasas into a Beverly Hills condo.