Lance Corporal Stephen Tatum had been due to face a military trial on charges of involuntary manslaughter, reckless endangerment and aggravated assault over his role in the killings in November 2005.
However in a statement released from the Marines Camp Pendleton base outside San Diego, the military said charges against Tatum had been dismissed "in order to continue to pursue the truth seeking process into the Haditha incident."
Defense lawyer Jack Zimmerman denied in a statement that Tatum had cut a deal with prosecutors in that would see him testify against a fellow Marine, Staff Sergeant Frank Wuterich, who faces court-martial on nine counts of voluntary manslaughter later this year.
"We emphasize that Lance Corporal Tatum will testify truthfully if called as a witness, but there is no deal for his testimony," Zimmerman said.
"It became clear to the experienced prosecution team that the right thing to do was to dismiss all charges.
"We believe the evidence shows that Lance Corporal Tatum reacted to an enemy attack the way he was trained to do."
Tatum faced trial for shooting dead two unarmed children as Marines cleared houses near the scene of a deadly roadside bombing in Haditha, 260 kilometers west of Baghdad, on November 19, 2005.
The deaths were part of a grim civilian toll from the Marines' actions in Haditha, where the victims were unarmed men, women and children.
Four soldiers were initially charged with murder and four officers accused of covering-up the incident.
The Marines said in a press release issued immediately after the violence in Haditha that 15 Iraqis had been killed by the roadside bomb that claimed the life of Lance Corporal Miguel Terrazas.
But a subsequent investigation by Time magazine showed that most of the dead were killed as Marines swept through three houses near the site of the bombing, prompting a wide-ranging internal investigation.
However, since charges against the eight Marines were first announced in December 2006, prosecutors have struggled to make the allegations stick.
Five of the eight men have now had charges against them dropped, while charges of murder were replaced by the lesser offense of manslaughter in the case squad leader Wuterich.
The military investigator overseeing Tatum's pre-trial hearing had recommended all charges against the soldier be dismissed, on the grounds that he shot at the children because another Marine, Wuterich, had started firing.
"I believe Tatum's real life experience and training on how to clear a room took over and his body instinctively began firing while his head tried to grasp at what and why he was firing," Lieutenant Colonel Paul Ware wrote.
"By the time he could recognize that he was shooting at children, his body had already acted."
A lawyer for Wuterich meanwhile said Friday that the decision to drop charges against Tatum showed that "there are tremendous holes" in the case.
"The prosecution couldn't afford to have Tatum acquitted. So by dismissing the charges and turning him as a witness they will attempt to blame it all on Staff Sergeant Wuterich," Mark Zaid said.
"They reached an early, rush-to-judgement conclusion that Wuterich was this rampaging murderer. And the truth is the facts don't support that."
The killings in Haditha are the most serious allegations of war crimes leveled at US forces since the 2003 invasion of Iraq, and is one of several cases involving Marines from Camp Pendleton.
Observers say incidents like the one in Haditha are very common, but rarely reach mainstream media.
Last Mod: 30 Mart 2008, 12:26