Prosecutors in Cassino, south of Rome, had opened a probe into monsignor Gerardo Antonazzo after receiving a letter from a seminarian accusing the bishop of sexually molesting him and others.
But prosecutor Luciano d'Emmanuele today released a statement saying no charges would be brought, La Repubblica daily said.
Antonazzo had been quoted yesterday stressing "how utterly unfounded the accusations are".
Sex abuse scandals have dogged the Catholic Church in recent years with alleged victims breaking their silence in the United States, Ireland, the Netherlands, Australia France, Germany, Austria, Belgium, Canada, Mexico and Poland.
