Philip, 97, voluntarily surrendered his driving licence on Saturday.
He has apologised for his part in an accident on the Sandringham estate in Norfolk when his Land Rover Freelander collided with another car carrying a baby last month, leaving two women needing hospital treatment.
Some 48 hours after the crash he was pictured driving without a seatbelt, prompting criticism.
Chris Long, Chief Crown Prosecutor for CPS East of England, said it had been decided it was not in the public interest to prosecute.
“The CPS has carefully reviewed material submitted by the police in relation to a traffic collision on the A149 on 17 January this year,” he said.
“We took into account all of the circumstances in this case, including the level of culpability, the age of the driver and the surrender of the driving licence.
“We have decided that it would not be in the public interest to prosecute.
“All those involved in the collision have been informed and provided with a full explanation in writing.”
The decision was made after considering all the evidence submitted by the police and in accordance with the two-stage test in the Code for Crown Prosecutors.
A Buckingham Palace spokeswoman said: “The Duke of Edinburgh respects the decision taken by the Crown Prosecution Service.”
Philip is believed to have remained at Sandringham, where he is spending much of his retirement, when the Queen returned to London this week following her annual winter break on the Norfolk estate.
He was left shocked and shaken by the crash on the busy A149, which happened when he pulled out of a driveway after being dazzled by low sun on January 17.
His car flipped over and he was trapped before being rescued by a passing motorist.
The nine-month-old baby boy in the other car was unhurt, but both women were treated in hospital, and passenger Emma Fairweather, who broke her wrist, called for Philip to be prosecuted if found to be at fault.
The duke faced criticism for taking too long to contact the occupants of the other car and for being seen driving without his seatbelt in the days that followed.
Although Philip has given up driving on public roads, he is still legally allowed to drive around private royal estates.