The socialite appeared late Friday in a FIFA World Cup courtroom after being arrested on suspicion of possession of marijuana at a quarterfinal match between Brazil and the Netherlands.
The authorities dropped the charges against Hilton, after her co-accused, Jennifer Rovero, "acknowledged to be in possession of cannabis, and pleaded guilty," said Brig. Sally De Beer, a spokeswoman for South African police.
Rovero, 31, from New York, was sentenced to a fine of 1000 rand ($130) or 30 days imprisonment, De Beer said.
A publicist for Hilton said the incident was a "misunderstanding."
"Paris Hilton was questioned today by police in South Africa on allegations of smoking marijuana," a publicist for Hilton, Dawn Miller, said in a statement.
"However I can confirm that the incident was a complete misunderstanding and it was actually another person in the group who did it," the statement said. "The case has been dropped against Paris and no charges will be made."
When told the case had been dropped, Hilton said "thank you" and left the courtroom.
Hilton wrote on Twitter later: "Hey guys, there's a lot of crazy rumors going around. Just want you all to know the truth. Everything is completely fine. I was not charged or arrested, cause I didn't do anything."
She said she was helping police with their investigation.
"Everyone was super nice and friendly to me," Hilton wrote. "I love South Africa! Such an amazing place, especially during The World Cup! Hope that clears everything up."
The socialite was wearing an off-white sleeveless blouse in court. Her hair was in pigtails and she had heavy black eyeliner. Hilton and Rovero were believed to have left court without speaking to reporters after a white van left the building with two of the passengers covering themselves to hide their identities.
Hilton was detained in Port Elizabeth earlier Friday, on suspicion of possessing marijuana, two South African police officers said on condition of anonymity earlier in the day.
The officers spoke on condition of anonymity, since they were not authorized to release Hilton's name before she appeared in court.
A local radio station in Johannesburg said Hilton was detained outside the Nelson Mandela Bay stadium, following the quarterfinal match between Brazil and Netherlands.
Hilton pleaded no contest in 2007 to alcohol-related reckless driving and was sentenced to 45 days in jail. After spending about 23 days in jail, Hilton told Larry King that the experience caused her to re-evaluate the role partying played in her life. She said she wanted "to help raise money for kids and for breast cancer and multiple sclerosis."
Investors for Hilton's 2006 box-office bomb "Pledge This!" have been battling the heiress in federal court, claiming that she didn't plug the film enough. Hilton, who testified last summer at a trial over the dispute, previously said that she was dissatisfied with the finished film, but she worked hard to make sure the college sorority romp succeed.
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Associated Press Writers Eric Naki and Fisnik Abrashi in Johannesburg and AP Entertainment reporter Derrik Lang in Los Angeles contributed to this report.
