Tristane Banon, a 32-year-old author, claimed the politician tried to rape her in 2003, but prosecutors said the evidence suggested only sexual assault -- which has a shorter statute of limitations -- rather than attempted rape.
"Even if a prosecution for attempted rape could not be launched for lack of sufficient proof, facts that could be qualified as sexual assault were recognised," the Paris prosecutor's office said in a statement.
Under French law sexual assault is a lesser charge than attempted rape and cannot be prosecuted if a complaint is made more than three years after the alleged incident. The state prosecutor has therefore halted its probe.
Banon had already said that if the prosecutor's office refused to take up the case she would attempt to bring a private prosecution, in which case an independent investigating magistrate would have to reconsider the evidence.
Both Banon and Strauss-Kahn, a senior Socialist politician 30 years her senior and a friend of his accuser's family, have been interviewed by police.
She claims he lured her to an unfurnished Paris flat on the pretext of giving her an interview for a book she was researching, then grappled with her "like a rutting chimpanzee" while attempting to pull off her jeans.
Strauss-Kahn admitted to police that he had made "an advance" on the young woman, but insisted he used no violence. He has lodged a counter-suit for defamation and has threatened to sue media which repeat the claims.
The former IMF director also still faces a civil suit in New York, where another young woman, a hotel chamber maid, claims he tried to rape her in May.
Strauss-Kahn was charged in a criminal case there, but New York prosecutors abandoned that case amid doubts over the woman's testimony. She is, however, pursuing a civil case for damages, despite the accused's furious denials.