The British Independent Police Complaints Commission has ruled that 11 officers involved in the shooting dead of Jean Charles de Menezes will not be disciplined.
The watchdog said no decision had been taken on four more senior officers.
Mr de Menezes, a 27-year-old electrician, was shot dead at Stockwell underground station in London in July 2005 when police mistook him for a suicide bomber.
The incident happened one day after an alleged failed attempt to repeat the 7 July attacks, which occurred exactly two weeks earlier.
A spokeswoman for the de Menezes family said his relatives were 'gravely disappointed' that the officers would not face disciplinary action.
London's Metropolitan Police welcomed the IPCC recommendation, saying it was 'pleased for these officers and their families who have faced much uncertainty'.
The Metropolitan Police is being prosecuted over alleged health and safety breaches related to the incident, although no individual officers are facing charges over the highly controversial shooting.