Sheppard, 54, left SCI Phoenix last month after spending 27 years in prison.
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He was one of four men convicted for his role in the robbery and murder of pharmacy owner Thomas Brannan in Overbrook in 1992. Sheppard was not the shooter.
Governor Tom Wolf commuted his life sentence late last year, but hours before his release, then-Delaware County District Attorney Kat Copeland, detained him on a shoplifting charge from 1992.
He left prison on December 10 surrounded by family and was heading to a halfway house as part of his clemency agreement.
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Ex-lifer back on track for release amid old shoplifting case in Philadelphia
Delaware County District Attorney Jack Stollsteimer said during a news conference that he is "ending the prosecution" in the 28-year-old case.
"We are ending the prosecution. The 28-year-old retail theft case of a pair of jeans that never left the Springfield Mall. We are not going to spend another dollar of the taxpayer money pursuing that case," he said.
The former district attorney said this was never about the shoplifting case, but about not notifying the victim's family. However, Stollsteimer said Wednesday that the victim's family was contacted before Sheppard was released from prison, and by his office about dropping the theft charge.
"We care so much about every victim and we wanted to make sure we talked to them and let them know what we were doing. That we were withdrawing prosecution on this case. They completely understand," Stollsteimer said.
Sheppard's story will also be featured in an upcoming documentary with Kim Kardashian West.