German state prosecutors on Monday said they had closed the case against Colonel Klein, the officer who ordered the controversial airstrike near Kunduz in September 2009.
According to the prosecution, neither Klein nor any of the other officers present before the attack were in a position to know that there were still civilians at the site at the time of the airstrikes.
"On the contrary, after a thorough assessment of the situation, they could assume that there were only insurgents present," the Karlsruhe-based prosecution said in a statement on Monday.
Colonel Klein had, therefore, not acted in violation of either the international or German criminal code, the prosecution said. Ordering the airstrike on two fuel trucks that had been hijacked by Taliban insurgents did not qualify as an illegal method of warfare.
On September 4, 2009, Klein had requested a NATO airstrike against the two trucks fearing they would be used to attack a German troop base nearby.
The attack, and the subsequent revelations that many civilians were among the 142 dead, triggered a wide debate in Germany. The participation by the Bundeswehr in the NATO mission in Afghanistan is widely unpopular in the country.
The Kunduz airstrike is also currently the subject of a parliamentary board of inquiry which, in the course of the week, is to question Defense Minister Karl-Theodor zu Guttenberg.
The inquiry is focusing on whether the government has been transparent about the events in Kunduz or whether there have been attempts to cover up possible wrongdoing by German officers.
A surge of attacks on German troops in Afghanistan, and the death of seven soldiers over the last two weeks, have also reignited the controversy over whether the Germany military should be part of the NATO mission.
A memorial service for four German soldiers killed last week is scheduled for Thursday and a government spokesman has announced that Chancellor Angela Merkel will take part. She is expected to reconfirm the government's commitment to and support of the troops in Afghanistan.
The announcement of the suspension of the investigation into Colonel Klein was welcomed by Defense Minister Guttenberg. He said it provided "the greatest possible legal security" for German soldiers in Afghanistan.
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