Prime Minister Najib Abdul Razak had returned RM2.03 billion from the RM2.6 billion that was channelled into his personal bank accounts as political donation, said attorney-general Mohamed Apandi Ali.
He disclosed that US$620 million was returned to the Saudi royal family in August 2013, two months after the last general election, because the sum was not utilised.
Apandi said he was satisfied based on evidence from witnesses and supporting documents submitted by the Malaysian Anti-Corruption Commission (MACC) that the original sum transferred between March 22 and April 10, 2013 was a "personal donation from the Saudi royal family given to him (Najib) without any consideration".
"MACC in their investigation, personally met and recorded statements from witnesses including the donor which confirmed the donation was given to PM personally," he added.
"I am satisfied there is no evidence to show there was a form of gratification given corruptly.
"Evidence obtained from the investigation does not show the donation was given as an inducement or reward for doing or forbearing to do anything in relation to his capacity as prime minister," he told a press conference in Putrajaya.
Apandi said since no criminal offence was committed, there is no necessity for Malaysia to make a request for mutual legal assistance to any foreign states for the purpose of completing the investigation.
Last July, the Wall Street Journal and whistleblower website Sarawak Report exposed the transfers based on leaked documents from Malaysian investigators.
Najib later denied he had abused public funds for personal gain, and described the sum as a political donation from a Middle Eastern source.
He also claimed that there is a plot to topple him using fraudulent allegations.
His detractors such as former prime minister Dr Mahathir Mohamad had dismissed the donation claim.