Scientists had believed that a grid-like pattern seen on the search tool off the west coast of Africa could have been the ancient city described by Plato.
However, Google has now confirmed that the Atlantic floor pattern, measuring about the size of Wales, was an "artefact" of its map-making process.
The maps are made using sonar measurements of the sea floor recorded by boats. The area in question was mapped by boats travelling in straight lines, a Google spokeswoman revealed.
"It's true that many amazing discoveries have been made in Google Earth including a pristine forest in Mozambique that is home to previously unknown species and the remains of an Ancient Roman villa. In this case, however, what users are seeing is an artefact of the data collection process," she said.