Cape and Islands District Attorney Michael O'Keefe filed the formal notice of abandonment Wednesday, citing "the unavailability of the complaining witness."
Spacey was charged with indecent assault and battery last year. The two-time Oscar winner denies groping the man, whose mother -- former Boston TV news anchor Heather Unruh -- first went public with the allegations in 2017.
Spacey's attorney did not immediately respond to Fox News' request for comment.
The news comes days after the man abruptly dropped a lawsuit he had recently filed against Spacey that sought damages for "severe and permanent mental distress and emotional injuries." The suit was dismissed "with prejudice," meaning it cannot be refiled.
The man did not receive a settlement to drop the civil case, Unruh said. His lawyer said he dropped it because he was emotionally overwhelmed and wanted only "one roller coaster ride at a time" and so chose to focus on the criminal case.
Earlier this month, Spacey's accuser was ordered to take the stand after he said he lost the cellphone he used the night of the alleged groping. The defense said it needed the phone to recover deleted text messages it said would help Spacey's case.
The man denied deleting messages or manipulating screenshots of conversations he provided to investigators. When he was pressed by the defense about whether he knew that altering evidence is a crime, he invoked his Fifth Amendment right against self-incrimination, and the judge said his testimony would be stricken from the record.
The judge then questioned how prosecutors would be able to bring Spacey to trial if the accuser continued to refuse to testify, and prosecutors told the judge they needed time to decide how to proceed.
In 2017, Unruh alleged that Spacey got her son drunk and sexually assaulted him at the Club Car, a bar on Nantucket where the teen worked as a busboy.
The man told police he went over to talk to Spacey after his shift because he wanted to get a picture with the former "House of Cards" star. He said Spacey bought him several drinks and tried to persuade him to come home with him before unzipping the man's pants and groping him for about three minutes.
Unruh's son told police he tried to move Spacey's hands, but the groping continued, and he didn't know what to do because he didn't want to get in trouble for underage drinking. The man said he fled when Spacey went to the bathroom.
Spacey -- who has faced several other sexual misconduct accusations -- was among the earliest and biggest names to be ensnared in the #MeToo movement against sexual assault and harassment that swept across the entertainment and other industries.
The Associated Press contributed to this report.