Alan Chadwick, 53, of Rochdale, Greater Manchester, has been told by the Crown Prosecution Service he will not be prosecuted.
Mr Chadwick, a newsagent for 30 years, was accused of murder and attempted murder after he stabbed two raiders as they tried to rob his shop. One of the men died and the other was seriously wounded.
He was due to appear before magistrates for committal to Crown Court in five days' time but his solicitor was told of the decision not to proceed by telephone on Tuesday. He received written confirmation yesterday.
Mr Chadwick, celebrating at his local pub, said last night: 'I feel great. It's been quite an ordeal for me but I'm glad it's all over.
'I had heard rumours they might drop the charges but I didn't want to build my hopes up. I really expected to have to go to court next week. Now that I've learnt it's true I feel on top of the world.'
His ordeal began last February after two men entered his shop in Yorkshire Street, Rochdale.
He was standing at the end of the counter when the men, Paul Heap, 22, and Spencer Reeves, 21, came in, demanded money then began beating him up.
As his family looked on, Mr Chadwick grabbed a flick knife kept behind the counter to open bundles of papers and stabbed both men.
Heap, who was from Rochdale, collapsed outside the shop and died. Reeves, also of Rochdale, was seriously injured and is still recovering.
The decision to prosecute Mr Chadwick, who was arrested and held in custody for 10 days, angered local people. Protesters obtained more than 7,600 signatures on a petition in two days objecting to his prosecution.Reuse content