Greater Manchester Police told the Mirror that the 33-year-old, who cannot be named for legal reasons, will face no further action after the investigation that began in June 2021.
A spokesman told the paper: "The investigation team and Crown Prosecution Service have been working together and reached the decision that the evidence available at this time does not reach the threshold set out on the Code for Crown Prosecutors.
"Greater Manchester Police is committed to investigating allegations to secure the best possible outcomes for all involved and will continue to work with partner agencies to ensure individuals are supported throughout investigations and beyond."
The player was suspended by Everton after he had been arrested and put on bail in July 2021, with the club at the time stating they would "continue to support the authorities with their inquiries"