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Mr Garrett resigned from Parliament last September when it was revealed he got a false passport using a dead child's identity in 1984.
He was prosecuted over the matter in 2005 and discharged without conviction. However, he failed to disclose during that trial that he had a previous assault conviction, over an altercation in Tonga.
In a memorandum to the court Mr Garrett's lawyer Gary Gotlieb stated that his client had "no previous convictions of any kind" when in fact Mr Garrett was convicted after a brawl in Tonga in 2002.
Mr Gotlieb submitted in the 2005 case that the offending was "truly trivial" and a "foolish prank".
Police investigated whether he had committed perjury by omitting the previous offence and today Detective Inspector Bruce Scott, of Waitemata police, said there had been no criminal offending.
"This matter has been subject to a thorough investigation and legal review," he said.
"It has been established that there are no valid reasons for bringing a charge of perjury, against the former Member of Parliament."
ACT MP and former leader Rodney Hide welcomed the police decision.
"I am very pleased and, as David explained it to me at the time, I thought that would be the ultimate case," he said.
"I am sure it will (help him move on) and I am looking forward to the apology from the Labour Party," Mr Hide said.
"This is another chapter that allows him to move on. He's certainly a very capable and intelligent man."
Mr Hide's leadership was tarnished after it was revealed he kept quiet about Mr Garrett's behaviour. He was subsequently rolled by former National leader Don Brash.
However, Mr Hide rejected that Mr Garrett was a factor in those events.
"The impact was entirely on David and his family."
ACT parliamentary leader John Boscawen said he was "delighted" by the police decision.
"David can be proud of the contribution he made in his short time as an MP, making New Zealanders safer with his three strikes legislation," he said.
"Now that a thorough investigation has found there are no valid reasons to lay charges against him, he should be left alone to get on with his life. I personally wish him all the best."
Hilary Calvert replaced Mr Garrett when he resigned.
She said she did not know him well but wished him well.
"I think it's a good response," she said.
Asked if she thought he should have lost his job over the affair she was unsure.
"I don't know the ins and outs of it."
Labour leader Phil Goff was unapologetic about going hard on Mr Garrett.
"For his sake I am very pleased that he's been cleared of the charge, it enables him to get on with his life. That doesn't make what he did right. Clearly he did things we think are unacceptable in terms of somebody holding public office."
Mr Garrett did not return NZPA calls.