A soldier in Australia's SAS will not face criminal charges for severing the hands of dead men suspected of being Taliban insurgents.
The incident in Afghanistan in 2013 was referred to the Australian Federal Police by army officials two years ago.
Alleged details were leaked to the Australian media at the time, sparking discussion about army's practices in Afghanistan.
Police have referred the matter back to the Australian Defence Force (ADF).
The investigation concerned a joint operation between Australian and Afghan soldiers to track down insurgents in Zabul province, Australian media said.
The Australian Broadcasting Corp reported that the SAS soldier removed the right hands of two men killed in the operation, to later identify them through biometric testing.
It took place during "the heat of battle", The Australian newspaper reported, bypassing the usual method of taking fingerprints.
Australian army officials have not spoken publicly about the incident.
In a brief statement on Thursday, the Australian Federal Police (AFP) said it had completed its investigation.
"As the matter is now with the Australian Defence Force, it would be inappropriate for the AFP to comment further," it said.
In May, Australia said it would send an additional 30 military advisers to Afghanistan, raising its current deployment to 300.