Uefa's disciplinary body has reviewed the case after the booing was reported by the match delegate following last month's home win over Seville and decided not to take any action.
A Uefa spokesman said: "It is confirmed that the Uefa control, ethics and disciplinary body has decided to close the disciplinary proceedings."
City's fans have regularly booed the anthem, which is taken from Handel's Zadok the Priest, to express their unhappiness with Uefa.
Issues that have angered fans include financial fair play sanctions and last season a City fans group protested after 650 CSKA Moscow supporters gained access to their stadium for their Champions League game, despite the Russian club being ordered to play it behind closed doors for racism offences.
Uefa's decision to take no action over the anthem had been expected after the organisation's general secretary Gianni Infantino said two weeks ago that fans had a right to boo anything they wanted.
Infantino said: "They are booing their team, they are booing opponents, they are booing the Uefa Champions League anthem.
"We have to not be offended by it, live with it and to make things always better and try to prove and show people what is down in our heart is football basically."
The report of the booing had been made by match delegate Geir Thorsteinsson, the chairman of the Iceland FA, which led to disciplinary proceedings being opened.
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