The decision came after a closed-door hearing involving witnesses and police in Brookline District Court.
After the hearing, Milbury said he was pleased with the ruling.
"Well, that's good that it's over a couple days before Christmas," said Milbury, a former coach and player with the Boston Bruins. "It was an unfortunate misunderstanding."
Police sought to have Milbury charged with assault and battery, making threats and disorderly conduct after the Dec. 9 incident at a public hockey rink in Brookline. They said Milbury grabbed, shook and threatened a boy who was fighting and jawing with his 12-year-old son.
Milbury, who has said he grabbed the player's uniform to stop the fight but never assaulted or threatened the boy, recounted his version of the incident in an official statement following the ruling:
"My family and I are gratified that the clerk magistrate found no reason to further investigate the incident at Larz Anderson Park two weeks ago when I separated two 12 year old boys in a Pee Wee hockey game, one of whom was my son. I was a coach and supervisor on the ice that day when the scuffle broke out after the game had concluded and the referee had left. I know I acted responsibly to break up an altercation between two young boys in order to prevent potential injury to both. My actions were in no way inappropriate and I would take the same actions today if confronted with a similar situation in the future."
The 59-year-old Milbury is also an NHL analyst with NBC Sports. CBC Sports and NBC Sports had both announced that Milbury would not appear on their networks while he addressed the allegations.
His lawyer, Mark Berthiaume, said Friday that Milbury will resume work after the holidays.
John Burke, lawyer for the family of the boy Milbury grabbed, said they were "obviously very disappointed with the magistrate's decision."
He said the family believes the boy was assaulted and the decision sends a message that violence by an adult against a child will be tolerated.
Milbury had the support of some members of the hockey community.
"Great news out of Boston! Mike Milbury is great guy, this was a bad deal from the get-go," tweeted Toronto Maple Leafs general manager Brian Burke late Friday.
Milbury, a one-time defenceman, played parts of 12 seasons with the Bruins and later served as coach, leading the team to the Stanley Cup final in 1990. He also was coach and general manager of the New York Islanders.