Father Hugh Kennedy (55) was asked to temporarily stop working in St Peter's Cathedral last year while Church authorities passed the information to the police and social services.
His decision to stop his work followed a meeting with he Bishop of Down and Connor Noel Treanor in July 2011.
Fr Kennedy was already on sick leave at that point, and described his situation as a “personal crisis”.
Specific allegations were not outlined but at the time Fr Kennedy issued a statement insisting he was not a child molester.
He has now been cleared of all wrongdoing after police confirmed that their investigation is now complete. No file will be passed to the Public Prosecution Service.
The priest will remain on leave from duties while a separate internal investigation by the Catholic Church is conducted.
Fr Kennedy was ordained a priest in 1981 when he was studying at the Irish College in Rome. He was appointed administrator at St Peter's in 2006.
A spokesman for the Diocese of Down and Connor said: “The diocese has received confirmation that, following an investigation by the relevant authorities, no criminal charges will be brought against Fr Hugh Kennedy. The normal review under the Church's Safeguarding Policy and |Procedures and its own internal process has resumed.”
In his statement last September, Fr Kennedy insisted he was innocent. “I can categorically state I have never violated or molested a child placed in my trust, either in a private or priestly capacity,” he said at the time.
“In order to reassure the parents of the children associated with Schola Cantorum, I am personally willing to engage immediately with as many of them as possible, to satisfy them of my bona fides. I am passing through a personal crisis with which I have to deal. I request space in which to do this. I repeat my readiness to co-operate with Church and State authorities. I ask for people of goodwill to pray for me in my hour of crisis.”