Lochte's lawyers sought to have the case dismissed, and though a lower court initially ruled the charges were valid, they have now been dismissed by an appellate court, applying a strict interpretation of Brazilian law.
During an interview with NBC's Matt Lauer last August, per USA Today's Rachel Axon, the 32-year-old Lochte said he was taking responsibility for the incident.
Lochte's interview with NBC, in which he claimed he and three other members of the USA swim team had been robbed at gunpoint in Rio, did not constitute a false report, the court decided.
Local media however said that prosecutors can appeal the ruling, and added that Lochte still faces other charges in Brazilian courts. Police said the swimmers had lied and no crime had been committed against them. Days later, Rio authorities said during a press conference that the US swimmers had vandalized the Shell gas station's restroom, citing surveillance video footage.
The charge against Lochte stems not from telling the exaggerated story to NBC days after returning to the USA, but from telling it to Rio police, who triggered an investigation of the incident.
The investigation found that Lochte and has teammates had been detained by armed security guards, who drew their weapons and demanded that the swimmers pay them money for the alleged vandalism at the gas station.
He was suspended from the US national swim team for 10 months for his actions at the gas station, a penalty that ended July 1.
The only damage caused by the swimmers at the gas station was the poster that Lochte knocked off a wall.
The court confirmed in a statement this week that it tossed out the case after determining that Lochte's robbery claim made to NBC did not constitute the filing of a fake report, a crime punishable in Brazil by up to 18 months in prison.