Patrick Crusius has been charged with 90 counts under federal hate crime laws and is set to face trial for the killings in January 2024.
The US Department of Justice announced its decision to not seek the death penalty against Mr Crusius, who is white, in a required filing in the federal court in El Paso on Tuesday.
“The United States of America hereby notifies the Court and Defendant PATRICK WOOD CRUSIUS that the Government will not seek the death penalty in the instant case,” the filing stated.
Investigators say that the suspect told authorities he had been targeting Mexicans when he drove 10 hours from Allen, Texas, to carry out the mass shooting on 3 August 2019.
The Walmart where the attack happened is popular with Mexican visitors who shop there after coming across from the border city of Juarez.
A majority of the victims were either Mexican or of Mexican descent.
No federal executions are being scheduled while the Justice Department carries out a review of death penalty reviews and procedures, which was ordered by attorney general Merrick Garland in 2021.
Mr Crusius has already pleaded not guilty in the state case where prosecutors are seeking the death penalty.
The announcement comes weeks after Jaime Esparza, the former El Paso district attorney, became the US attorney for West Texas. Mr Esparza said in his previous job that he would seek the death penalty for Mr Crusius.
Yvonne Rosales, the previous district attorney leading the state’s case against Mr Crusius, resigned in November amid criticism about her handling of the case, and hundreds of others in El Paso.
A replacement prosecutor was appointed by Texas Governor Greg Abbott in December.
The Associated Press contributed to this report