The case was marked "discontinued/withdrawn" on the Federal Court website on Friday morning.
Mr Murdoch's lawyer John Churchill maintains there was no truth to the allegations made by Crikey.
"Mr Murdoch remains confident that the court would ultimately find in his favour," he said in a statement.
"However he does not wish to further enable Crikey's use of the court to litigate a case from another jurisdiction that has already been settled."
The media mogul's legal team called the case a "marketing campaign designed to attract subscribers and boost their (Crikey's) profits".
The move comes days after the Fox News network settled a lawsuit with a US voting system provider for $1.2 billion over false claims aired in the wake of the 2020 US presidential election.
Mr Churchill says the American case was irrelevant to Crikey's litigation because the US plaintiff did not argue that Mr Murdoch was personally responsible for the January 6 uprising, which is what the Australian news site alleged.
Regardless Crikey's legal team, headed by Michael Bradley from Marque Lawyers, was satisfied with the result.
"He'll (Lachlan Murdoch) be up for Crikey's legal costs. We and our client are well pleased," the firm's Twitter statement said.
Mr Murdoch sued Crikey's publishers Private Media over an allegedly defamatory June 29 opinion piece that was taken down and then re-posted on August 15.
Crikey political editor Bernard Keane, former editor-in-chief Peter Fray, chairman Eric Beecher and CEO Will Hayward were also named in the lawsuit.
Mr Murdoch alleged the article titled "Trump is a confirmed unhinged traitor. And Murdoch is his unindicted co-conspirator" conveyed a meaning that he illegally conspired with Mr Trump to "incite a mob with murderous intent to march on the Capitol" in Washington DC on January 6.
In its defence, Crikey said Mr Murdoch was "morally and ethically culpable" for the attack on the Capitol.
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