The Swiss mostly blamed U.S. authorities for failing to provide confidential testimony about Polanski's sentencing procedure in 1977-1978.
The Justice Ministry also said that national interests were taken into consideration in the decision.
"The 76-year-old French-Polish film director Roman Polanski will not be extradited to the USA," the ministry said in a statement. "The freedom-restricting measures against him have been revoked."
It was unclear if Polanski had already left his Swiss chalet in the resort of Gstaad, where he has been held under house arrest since December.
