The announcement was made by the Orange County district attorney at a Wednesday morning press conference, where video of the altercation was shown. It comes almost exactly a year after the incident.
Prosecutors would not be able to prove beyond a reasonable doubt that Officer Kevin Ferguson used excessive force, according to the the OCDA's Office.
"It is our office's conclusion based on all the evidence, that we are not able to prove, the evidence does not support a finding beyond a reasonable doubt that Mr. Ferguson committed a crime," said Deputy District Attorney Ebrahim Baytieh.
The fight on Ferguson's front lawn 11 months ago was captured on two widely circulated videos that spurred heated anti-police protests in the city.
The videos showed Ferguson exchanging angry words with several teenagers who had walked across his lawn. A teen can be heard in the videos saying that the officer made an offensive comment to a female friend of his.
After the argument turned physical with the 13-year-old, Ferguson pulled out a gun and fired it into the ground, sending the teens running and screaming.
Prosecutors called Ferguson's actions "unwise, immature and flat-out horrible" but said they did not violate the law.
"The evidence does not establish beyond a reasonable doubt that Ferguson used an unreasonable amount of force while detaining" the boy, the district attorney's office said in documents.
The boy and another teen were arrested, but Ferguson was not, fueling the anger of hundreds of protesters who took to the streets in the nights that followed. Dozens were arrested after blocking traffic.
In one of the videos, posted on YouTube and spread on social media, Ferguson said he had heard the boy say he was going to "shoot" him, but the teen insists he said he was going to "sue" him.
Baytieh conceded that a "reasonable person can hear shoot" instead of sue.
Ferguson's attorney Larry Hanna has said Ferguson feared for his own safety and that of his sick father because of the teens, who he had reported to police before.
After the announcement, the LAPD issued a statement that read in part: "The Department initiated a personnel complaint and a Categorical Use of Force investigation following the initial incident, and we have been working with the Orange County DA's office and have awaited their decision about criminal prosecution in order for us to complete our investigation."
They added that Ferguson has been assigned non-field duties pending the outcome of the investigation.
The Associated Press contributed to this report.