Assange contends the United States should recognize his First Amendment rights as a journalist.
Assange's Swedish lawyer Per E. Samuelson declared Friday that "this is a total victory for Julian Assange".
The Australian, who has lived inside the embassy for nearly five years, said the "road is far from over", adding it was "extremely regretful" he was still being threatened with arrest if he leaves the embassy.
He says says his battle is not over, and "the proper war is just commencing".
Assange always denied the allegations, which he feared would lead to him being extradited to the United States and facing trial over the leak of hundreds of thousands of secret US military and diplomatic documents in 2010, which brought WikiLeaks to prominence. That is no longer the case.
Although he has not been formally charged, Assange has often implied - without much hard evidence - that the U.S. would gladly try to assassinate him. Long added: "This has gone on long enough".
Samuelsson also said that the decision meant Assange "is free to leave the embassy whenever he wants", though he later told the TT news agency that he did not know when Assange might leave.
A lawyer for the woman who alleges she was raped by Julian Assange says "it is a scandal that a suspected rapist can avoid the judicial system and thus avoid a trial in court".
Julian Assange's lawyer is asking French president Emmanuel Macron to intervene in support of the WikiLeaks founder. "He is the only political prisoner in Western Europe". "Consequently, there is no basis upon which to continue the investigation". "I can conclude, based on the evidence, that probable cause for this crime still exists", she told reporters Friday, but said that "at this point, all possibilities to conduct the investigation are exhausted". Swedish prosecutors dropped cases of alleged sexual misconduct when the statute of limitations ran out in 2015, leaving only the rape allegation.
The prosecutor, Marianne Ny, told a news conference in Stockholm that she could make no judgment on Assange's guilt or innocence. The Supreme Court considered the public interest aspect of the investigation, as well as the risk that Julian Assange would evade having legal proceedings against him, to be of continued importance, and took the view that the continued arrest warrant was proportionate despite the amount of time that had passed.
Ny says she has withdrawn a European arrest warrant.
London police ended the round-the-clock guards at the Ecuadorian embassy in October after anger over the cost.
"Now that the situation has changed and the Swedish authorities have discontinued their investigation into that matter, Mr Assange remains wanted for a much less serious offense".
Sweden has revoked a European Arrest Warrant for Assange, so British police are no longer seeking him for extradition.
After the Swedish announcement. WikiLeaks tweeted: "UK refuses to confirm or deny whether it has already received a U.S. extradition warrant for Julian Assange. Focus now moves to United Kingdom", the group tweeted. Sweden drops rape charges against Assange [Image by Jack Taylor/Getty Images] The WikiLeaks founder has insisted that the sex was consensual, saying both women participated eagerly and did not appear to be uncomfortable.
Earlier in Stockholm, Marianne Ny, Sweden's director of public prosecutions, said the rape investigation had been dropped because there was "no reason to believe that the decision to surrender him to Sweden can be executed in the foreseeable future". Assange has stayed at the Ecuadorian embassy in London since 2012, when he first sought asylum to avoid being extradited for the sexual assault allegations. He has been there ever since, fearing that if he is arrested he might ultimately be extradited to the United States.