Debra Jean Milke's four-year-old son, Christopher, was shot in a Phoenix desert in 1989 and his mother was convicted of his slaying the following year.
Milke, who has always protested her innocence, had her conviction overturned in 2013 and had been free on bail, but the 51-year-old woman had always faced the possibility of a retrial.
However, a judge in Maricopa County has now dismissed the case with prejudice meaning charges cannot be filed again.
Prosecutors argued that Debra's son had been lured to a Phoenix desert under the assumption he was visiting Santa Claus at a shopping mall and was subsequently shot by two men in the back of the head.
Christopher's mother stood accused of allowing her son to be taken to the desert by her roommate James Styers because she no longer wanted to care for him, but didn't want him to remain with his father.
Milke was accused of allowing Styers and a second defendant named Roger Scott to murder her son a few days before Christmas, an accusation which the heartbroken mother strenuously denied.
Both Styers and Scott were convicted and sentenced to death and have since asserted that Christopher's mother had nothing to do with her son's killing.
In addition to this, a hearing in 2013 established that prosecutors had failed to disclose a history of misconduct on the part of a detective, Armando Saldate, who was involved in the case and testified against Milke.
Debra Milke maintains that she was never given a fair trial and was seen hugging her lawyer and sobbing as she left the courtroom yesterday.
Both Styers and Scott are awaiting execution.
