Jefferson County Attorney Mike O'Connell told the court there was not enough evidence to move forward with the case against Scheffler, who was charged on May 17 with four counts, including felony second-degree assault on a police officer.
"Mr. Scheffler's characterization that this was a 'big misunderstanding' is corroborated by the evidence," O'Connell told the court.
"Mr. Scheffler's actions and the evidence surrounding their exchange during this misunderstanding do not satisfy the elements of any criminal offences."
The charges were dropped with prejudice, meaning they cannot be refiled.
Scheffler was arrested for allegedly attempting to drive around traffic that was backed up due to a pedestrian fatality investigation outside Valhalla Golf Club. He was released from jail in time to compete in the tournament.
According to the police report, officer Bryan Gillis stopped Scheffler's vehicle and attempted to give him instructions but the golfer "refused to comply and accelerated forward, dragging" the officer to the ground.
Last week, the Louisville Metro Police Department said they took "corrective action" against Gillis for not activating his body-worn camera during the incident.
Scheffler, who had also been charged with third-degree criminal mischief, reckless driving and disregarding traffic signals from an officer directing traffic, said in a statement he was happy to put the incident behind him.
"As I stated previously, this was an unfortunate misunderstanding," Scheffler said in a statement. "I hold no ill will toward Officer Gillis. I wish to put this incident behind me and move on, and I hope he will do the same.
"Police officers have a difficult job and I hold them in high regard. This was a severe miscommunication in a chaotic situation."
Attorney Steve Romines said Scheffler was unaware at the time that a fatality had occurred and was directed, as other players were, on how to proceed into Valhalla.
Romines also said Scheffler, who is in the midst of a remarkable season of golf, would not be filing a civil lawsuit and wanted to focus on his career rather than get distracted by litigation.
"He's happy it's over, he wants to move on," Romines told reporters. "He has no desire to a) be involved in litigation and b) try to recover money from the taxpayers of Louisville."
Scheffler arrived at Valhalla that week as the pre-tournament favourite and seeking a fifth win in six starts and a second consecutive major title. He ultimately finished eight shots behind the winner and in a share of eighth place.
Scheffler is scheduled to return to action at next week's Memorial Tournament in Dublin, Ohio, before heading to the year's third major, the June 13-16 US Open at Pinehurst Resort in North Carolina.
