The Multnomah County District Attorney's office said a "sustainable criminal case does not exist" after looking into claims by Molly Hagerty, who alleged Gore, 62, had made "unwanted sexual contact" with her during a massage at his hotel in 2006.
Prosecutors declined to pursue the case after interviewing witnesses who were at the hotel and since Hagerty failed a polygraph test. The D.A.'s office also said forensic testing disputed her accusations.
"Mr. Gore unequivocally and emphatically denied this accusation when he first learned of its existence three years ago," Gore family spokeswoman Kalee Kreider tells PEOPLE. "He respects and appreciates the thorough and professional work of the Portland authorities and is pleased that this matter has now been resolved."
Authorities reportedly questioned Gore last week after re-opening the investigation.
Reporting by SANDRA SOBIERAJ WESTFALL