The officers were cleared of murder and other state charges last year. Amadou Diallo, 22, died two years ago in a hail of 41 bullets outside his Bronx apartment in what the officers testified was a tragic error.
In a statement released in Washington, the Justice Department said an investigation by its Civil Rights Division and by U.S. Attorney Mary Jo White in Manhattan had determined that federal charges against the officers were not warranted.
Federal officials concluded they "could not prove beyond a reasonable doubt that the officers willfully deprived Mr. Diallo of his constitutional right to be free from the use of unreasonable force," according to the statement.
Acting U.S. Attorney General Eric H. Holder Jr. said his office agreed with the findings of the investigation.
"Our thoughts and prayers go out to the members of his family for this tragic loss," Holder said. "We must learn from this deeply troubling incident."
Diallo's mother told reporters that Mary Jo White met with the family for more than an hour to explain why federal charges will not be brought. Mrs. Diallo said the department's decision demonstrates a tragedy like Amadou Diallo's death could happen again.
"I am morally disappointed. This is a sad day for everyone," she said.
The Diallo family, along with many of their supporters, had hoped for a federal civil rights prosecution of the officers. Diallo was black, and the four undercover officers were white in the Feb. 4, 1999, shooting that exacerbated racial tensions in the city.
Attorneys for the officers said the decision not to prosecute would bring the case to an end for their clients.
"It's a decision that's right on the law and right on the facts," said Steven Brounstein, attorney for Officer Kenneth Boss. "It was a tragic accident. I'm just pleased that the decision has been made."
The Diallo family still has a $61 million civil suit against the city, its last legal recourse in the case. Diallo was shot when he reached for his wallet; the officers said they believed he was reaching for a gun.
White's office proposed the meeting with the Diallo family after Robert Conason, the attorney for the victim's mother Kadiatou Diallo, sent a letter to Holder blasting Justice Department officials.
"The seeming lack of courage displayed by the failure to either seek an indictment or formally close the investigation could only be taken as an example of politics at its worst," Conason said.
Federal civil rights prosecutions following state acquittals are extremely rare. In the Diallo case, authorities would have required proof that the officers violated Diallo's civil rights by intentionally using excessive force.
In the state trial, the officers argued they fired in self-defense, believing that Diallo was about to pull a weapon on them.
The officers were members of the NYPD's Street Crime Unit at the time of the shooting. They were driving around the Bronx in an unmarked car and wearing plainclothes when they spotted Diallo.
Shortly after Diallo's death, White announced her office had begun the civil rights probe.
White's office also has a separate investigation under way into police training and practices, especially by the Street Crime Unit.
The Diallo family, in its civil lawsuit, claims the officers used unnecessary force to deprive their son "his right to life."
It also charges the shooting resulted from racial profiling sanctioned by the police department, including stopping and frisking black males without justification.
©MMI Viacom Internet Services Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report