Extensive investigations found "no evidence" to support Ofarim's claims and concluded that the incident had not occurred as described by the singer, the public prosecutor's office in Leipzig said.
What is the case about?
Last year, Ofarim posted a video to social media, alleging staff at the Westin Hotel in Leipzig ordered him to put away a Star of David pendant hanging on a chain around his neck.
At the time, the video sparked outrage across Germany and especially among the Jewish community, with people protesting in solidarity with Ofarim and standing against antisemitism.
Prosecutors said the investigation against the hotel worker had now been dropped, adding that the musician had posted the video "in the knowledge it was false and would have defamatory consequences for the hotel employees."
Ofarim's version of events came under scrutiny when footage from a security camera, published by German media in the weeks after the incident, did not appear to back up his account.
In response to the footage, Ofarim — who grew up in Germany and describes himself as a "secular Jew" — told the tabloid Bild newspaper: "I don't know if I was wearing the chain over or under my shirt. But it's not about that, it is about being Jewish in general."
The staff member then brought his own charge of defamation against the singer.
A higher court in the eastern city, Leipzig Regional Court, must now decide whether to allow the charges against the musician.
fh/nm (dpa, AFP)