The decision capped a three-year investigation into allegations that companies were set up to funnel illicit foreign donations to Sharon's 1999 primary campaign.
Israel's Haaretz newspaper said the charges against Sharon's son Omri would be "relatively minor".
If Sharon had been indicted, his "disengagement" plan could have been jeopardised after Israel's parliament on Wednesday removed a major hurdle by approving compensation to Jewish
settlers to be evacuated from Gaza and parts of the West Bank.
Sharon had denied allegations of wrongdoing in the funding case, saying his sons on their own handled the primary campaign financing.
Charges against Omri Sharon (R)
are expected to be 'minor'
Last June Mazuz dropped a more serious bribery case against Sharon, citing lack of evidence for an indictment.
Prosecutors had investigated whether Sharon, as foreign minister in the 1990s, had used his influence to help a developer win approval for an Aegean resort.