John Mackay and Tom Williams died following an explosion at the former Tessworks steel site in September 2019.
The investigation into the tragedy will now be led by the Health and Safety Executive.
An HSE statement said: “Following a thorough joint investigation by Cleveland Police and HSE, there is insufficient evidence to support gross negligence manslaughter or corporate manslaughter charges. The families of the deceased have been informed of this decision.”
HSE principal inspector John Heslop said: “Although some of these developments are difficult for the families of John and Tom, I have assured them that the criminal investigation into their deaths remains ongoing.
“We also made it clear our investigation will be a thorough one, while also recognising the desire for a speedy conclusion.”
HSE added: “This remains a criminal investigation that Cleveland Police will continue to support.”
One of the victims worked for John F Hunt and the other for Nationwide Platforms.