A copy of the LA County District Attorney's charge evaluation worksheet seen by TMZ states that there is insufficient evidence to mount a case.
It was reported yesterday that Lohan and her assistant Gavin Doyle were being treated as potential suspects in the investigation.
An alleged theft of $100,000 (£63,404) of watches and sunglasses was originally reported to police by Sam Magid on August 19. However, he later changed his story, insisting that no jewellery had been taken.
The LA County DA's office said in a statement: "The District Attorney's Office received no evidence that any jewellery, including watches, was taken. The evidence presented to us... was valued at $6,400 (£4,047) and included $3,000 (£1,897) in cash, four pairs of sunglasses, an iPod and keys to two cars and a house."
It therefore appears that the original theft complaint as reported earlier in August was not actually presented to the DA's office.
Lohan's father Michael had yesterday spoken out in support of his daughter, describing the reported investigation as "a sick witch hunt".