The body of 25-year-old kindergarten teacher Simone Strobel was found under palm fronds at a Lismore sportsground in the NSW northern rivers in February 2005.
More than 18 years later, the case against Tobias Friedrich Moran, 43, has been abandoned.
Mr Moran was charged with murder and acting with intent to pervert the course of justice in July 2022, after being extradited to NSW.
The charges were withdrawn after the Office of the Director of Public Prosecutions declined to certify them when his matter was mentioned at Lismore Local Court on Wednesday.
"The ODPP notes the possibility of future coronial proceedings and makes no further comment," a spokesperson said.
Mr Moran's wife Samantha appeared alongside him to read a prepared statement in Perth.
"I know that there is not a day that goes by that Toby does not think about Simone, and wishes that he had stopped her from walking away that night," she said.
Mr Moran remains traumatised by Ms Strobel's death and by the speculation surrounding him, she said.
Ms Moran thanked "all those who know Toby" for their support.
"And thank you for the work of the independent (Director of Public Prosecutions)," she added.
Mr Moran was granted bail a week after being charged in 2022 to return to his family and home in City Beach, Western Australia, with a $250,000 surety and a requirement to surrender passports and report to police thrice weekly.
NSW prosecutors opted not to proceed with an application to detain him that day after considering the case, before eventually withdrawing the charges altogether.Â
His barrister previously told the court there was no new evidence linking Mr Moran to the death and the magistrate described the circumstantial case as "not the strongest" when he was granted bail.
A $1 million reward for information was announced in 2020, 15 years after NSW police began working with German authorities on the investigation.
A 10,000 euro reward was announced by German authorities in 2014.
Both depend on a conviction.
A 2007 inquest found insufficient evidence to lay any criminal charges.
It found Ms Strobel spent the previous two weeks travelling the east coast of Australia with Mr Moran, then known as Tobias Suckfuell, with his sister and another person.
Police told the inquest they suspected Mr Moran was involved in her death.
The trio reported Ms Strobel missing after packing up the campsite the morning after she had walked away from the group as the two siblings fought over a family matter, they told police.
A second inquiry scheduled in February 2021 was postponed.
The court will hear applications to pay Mr Moran's legal defence costs on June 28.
