Skakel was found guilty of murder in 2002 and served 11 years in prison, but was freed when a judge overturned his conviction in 2013.
Prosecutors faced several difficulties retrying Skakel, including a lack of physical evidence and the death of a key witness.
The announcement comes on the 45th anniversary of Moxley’s murder.
Moxley’s brother, John, said outside the courthouse that he still believes Skakel killed his sister but he and their mother, Dorthy, are at peace with the decision not to seek a second trial.
“His life will never be the same. Mine will never be the same. I wouldn’t want to walk a mile in his shoes,” Moxley said.
Skakel did not comment during the hearing or outside court. His attorney, Stephan Seeger, said Skakel is innocent.
“He’s been innocent from day one. This crime should have never been something that ended up in a trial in the first place,” Seeger said.
The case drew wide attention because of the Kennedy name, Skakel’s rich family, numerous theories about who killed Moxley and the brutal way in which she died. Several other people, including Skakel’s brother Tommy Skakel who denied any role in the killing, have been mentioned as possible killers. Robert F. Kennedy Jr. has been one of Skakel’s most prominent defenders.
On the night of the killing, Martha Moxley and other teens in the Belle Haven neighborhood were out doing pre-Halloween pranks and had visited the Skakel home, police said.
Her body was found the next day on her family’s estate, across the street from the Skakel home. She had been beaten with a 6-iron owned by the Skakel family and stabbed in the throat with a piece of the golf club’s shattered shaft, police said.
At Skakel’s trial, prosecutors suggested Skakel was angry with Martha because she had spurned his advances while having a sexual liaison with his brother Tommy.
Michael Skakel said he was miles away from the crime scene watching a “Monty Python” television show with others at the likely time Moxley was killed. But prosecutors maintain he could have killed her after returning home that night.
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Police interviewed numerous witnesses, but the case went cold.
Interest was revived in 1993, when author Dominick Dunne published a novel, “A Season in Purgatory,” based on the murder.
Then, in 1998, former Los Angeles police detective Mark Fuhrman, who gained notoriety in the O.J. Simpson murder case, published his own book, “Murder in Greenwich,” which asserted Michael Skakel killed Moxley in a jealous rage after seeing Thomas Skakel kiss her.
A one-judge grand jury was announced that same year to investigate the killing, resulting in Skakel’s arrest in 2000 and conviction in 2002.
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(© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)