“The federal prosecutor... believes, along with the Justice Ministry, that the published information was not a state secret in the sense of the criminal law,” the agency said in a statement.
However, prosecutors will continue their investigation into those who may have leaked the information to journalists at Netzpolitik.
It has assigned the investigation of "unknown persons with a duty to keep secrets" over infractions against official secrecy to local branch offices.
Netzpolitik editor Markus Beckedahl immediately tweeted that "we want clarity about whether we were under surveillance. And who knew what when about the fact that we were being investigated for treason."
Wir wollen Klarheit darüber, ob wir überwacht wurden. Und wer davon wann wusste, dass gegen uns wegen #Landesverrat ermittelt wird.— netzpolitik (@netzpolitik) August 10, 2015
In a blog post later on Monday, Beckedahl said that "this is nice, and long overdue, but of course it's not enough for us."
Netzpolitik still has a list of demands, including the authorities coming clean about whether the journalists were surveilled and the exact order of events and flow of information within the government concerning the case.
"The attention and the public debate have protected us," he added. "We hope that the attempted intimidation against us and all other journalists who report on the surveillance complex and the NSA [National Security Agency] scandal has failed on a grand scale.
"If that is so, this confrontation has strengthened journalism in Germany."
Beckedahl didn't forget his sources, complaining about the ongoing investigation to uncover them - although for lesser charges than treason.
"Now would also be the right time to discuss improved whistleblower protection. Germany is still a developing country in this area," he wrote.
Last week Justice Minsiter Heiko Maas fired chief prosecutor Harald Range over the Netzpolitik scandal.
But Beckedahl posted on Friday that he and his team remained under threat of prosecution and surveillance, with no more protection than Range's promise that the investigation was 'on hold' - a term with no legal meaning.
It also emerged on Friday that prosecutors were investigating German MPs over Netzpolitik's publication of classified documents revealing plans by Germany's domestic intelligence service (VS) for new types of mass surveillance.
The spies believe that the leaks may have come from information about their plans which they provided to lawmakers on a parliamentary panel.