Mr McRae was referred to the Victorian Legal Services Board and Commissioner by the Royal Commission into the Management of Police Informants in 2020.
The inquiry investigated Victoria Police officers' handling of former gangland lawyer-turned-police informant Nicola Gobbo, also known as Lawyer X.
"We have now concluded our investigation into the matters referred to us by the Royal Commission into the Management of Police Informants regarding the conduct of the Executive Director of Legal Services at Victoria Police Findlay McRae," the VLSBC said on Thursday.
"Having conducted a thorough examination of these matters, we have determined Mr McRae's conduct does not constitute unsatisfactory professional conduct or professional misconduct and we will not be taking disciplinary action."
"Mr McRae's handling of Victoria Police's disclosure to the (Department of Public Prosecutions) along with Ms Gobbo's civil litigation, fell short of the commission's expectations of the most senior lawyer in Victoria Police," commissioner Marget McCurdo wrote in the final report.
"The commission considers that he should have ensured that adequate disclosure was made to the DPP much earlier and much more comprehensively than it was."
Chief Commissioner Shane Patton on Thursday told ABC Radio he was not surprised Mr McRae was cleared.
"He's a man of immense integrity and he did everything he could throughout that period to be as transparent and provide clear and strong advice," Mr Patton said.
"It's great that he's been publicly vindicated."
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