Karen Sala claimed she had a sexual relationship with Reeves during and after her marriage and that they lived together.
Reeves vehemently denies ever having met the woman.
Sala was seeking 3 million Canadian dollars ($2.8 million) a month in spousal support, retroactive to November 2006. She also wanted $150,000 ($144,000) a month in child support, going back to June 1988.
However, a judge in Ontario dismissed the case, saying Sala's allegations were "so incredible" that no reasonable judge would accept them.
Judge Fred Graham said any trial would be "a waste of limited judicial resources," after Sala disputed DNA proving Reeves was not the father. Sala claimed the results had been tampered with or that Reeves used hypnosis to affect the results.
"I do know for a fact that he is the biological father," said Sala, who is representing herself, adding that she has proof but cannot show it to the court.
She said Reeves grew up down the street from her and she has known him since she was four or five. She did not connect him to the actor until much later because she knew him by the name Marty Spencer, she said.
Lawyer Lorne Wolfson, representing Reeves, suggested Sala's ex-husband is in fact the father of the children, as stated in documents in their divorce proceedings.
Sala had declined to bring a motion to have her ex-husband's DNA tested and has refused to produce her children's birth certificates, Wolfson said.
Reeves, 45, grew up in Toronto before leaving for Hollywood in 1986. He starred in the "Matrix" films as well as "Speed" and "Bill & Ted's Excellent Adventure."
