Solo, 33, who has played on two Olympic gold medal-winning teams, had pleaded not guilty to striking her sister and nephew during a dispute in June at her home in the Seattle suburb of Kirkland. She had been slated to stand trial next week.
"Today's decision brings closure to what has been one of the most difficult and emotionally draining times of my life," Solo said in a statement on Facebook in which she thanked her fellow players, coaches and others, "all of whom, under great pressure to do otherwise, chose to stand by and believe in me."
Domestic abuse cases have garnered national attention since the National Football League's handling of the Ray Rice case, in which Commissioner Roger Goodell initially suspended the former Baltimore Ravens running back for two games last year for knocking out his fiancee, whom he has since married.
Goodell later suspended Rice indefinitely when surveillance video was released by website TMZ showing the punch. Rice won an appeal of his suspension in November and is now a free agent.
Solo's attorney, Todd Maybrown, said he had filed a motion in Kirkland Municipal Court to dismiss the charges, arguing the sister and nephew had been uncooperative, including failing to show up for depositions.
Prosecutors said the pair had cooperated, a local broadcaster reported.
Maybrown has said that Solo was the victim in the altercation and that she was hit over the head with a broom handle by a family member.
Police said that during the incident Solo appeared to be upset and intoxicated, while her adult sister and her 17-year-old nephew had visible injuries. She faced two counts of fourth-degree domestic violence, gross misdemeanors.
In November, the trial was delayed after a judge found that her attorney should be allowed to interview the family members with a court stenographer present, despite Solo's sister and nephew's refusal to do so.
Prosecutors maintained the "highly emotional" nature of the case necessitated some limits on how the interviews were recorded.
The Kirkland city attorney's office did not immediately respond to requests for comment.
(Reporting by Eric M. Johnson in Seattle; Editing by Cynthia Johnston, Peter Cooney and Eric Beech)