Alec Baldwin no longer faces criminal charges in connection with a fatal on-set shooting in October 2021.
In connection with the event that occurred while Rust was being filmed in New Mexico, the Emmy Award-winning actor was charged with two counts of involuntary manslaughter.
Halyna Hutchins, a cinematographer, was murdered by a real bullet fired from a pretend gun that Baldwin was using.
The development comes less than two weeks before a trial was set to begin.
A statement released by New Mexico special prosecutors Kari Morrissey and Jason Lewis said that “over the last few days… new facts were revealed” in the case, requiring further investigation.
“This decision does not absolve Mr Baldwin of criminal culpability and charges may be refiled,” the statement continued, adding: “Our follow-up investigation will remain active and ongoing.”
A lawyer for Mr Baldwin praised the move by prosecutors.
“We are pleased with the decision to dismiss the case against Alec Baldwin and we encourage a proper investigation into the facts and circumstances of this tragic accident,” his lawyer, Luke Nikas, told the BBC in a statement.
Mr Baldwin had been practising firing the gun on set at a ranch near Santa Fe when it went off, fatally striking 42-year-old Ukrainian-born Hutchins and wounding director Joel Souza.
The actor denied pulling the trigger, although an FBI report later concluded that the gun could not have been fired without the trigger being pulled.
He had been due in court for a preliminary hearing on 3 May.
The film’s armourer, Hannah Gutierrez-Reed, is also facing two counts of involuntary manslaughter. The statement from the special prosecutors says the charges against her remain unchanged.
A lawyer for Ms Gutierrez-Reed told BBC News that they “fully expect at the end of this process that Hannah will also be exonerated”.
According to the LA Times, prosecutors had recently learned that the gun used in the shooting, a .45 Colt revolver, had been modified with a new trigger in a way that could have made a misfire more likely.
Thursday’s statement by prosecutors made no mention of the gun, but said that the newly revealed facts “demand further investigation and forensic analysis”.
Prosecutors had accused Mr Baldwin, 65, of showing a “reckless” disregard for the safety of his colleagues.
Mr Nikas, a lawyer for the star of The Hunt for Red October, previously called the initial decision to charge his client “a terrible miscarriage of justice”.
“Mr Baldwin had no reason to believe there was a live bullet in the gun – or anywhere on the movie set,” Mr Nikas said.
“He relied on the professionals with whom he worked, who assured him the gun did not have live rounds.”
In an Instagram post after the announcement was made, the 30 Rock actor thanked his lawyer and his wife, Hilaria Baldwin.
“I owe everything I have to this woman. (and to you, Luke),” he posted.
In order to have been found guilty prosecutors would have had to convince a jury that he had acted with “criminal negligence”.
If convicted, he could have faced up to 18 months in prison.
The Santa Fe district attorney had initially added a firearm enhancement charge, which could have added five years to his sentence.
But it was dropped after prosecutors determined that the enhancement law was not in place at the time of the shooting.
The decision to drop the charges comes on the same day that Rust resumed filming – 18 months after the shooting.
Melina Spadone, a lawyer for Rust Movie Productions, said new rules on the set “will bar any use of working weapons and any form of ammunition”.
“Live ammunition is – and always was – prohibited on set.”
According to Variety magazine, Mr Baldwin is currently filming Rust on location in Montana.
Hutchins’ widower, Matthew, will be an executive producer. Baldwin last October reached a settlement in a wrongful death lawsuit brought by her family.
Rust Movie productions, which Baldwin is part of, said in February the scene that was being rehearsed when Hutchins was shot has now been rewritten.