The death of Alton Sterling in July 2016 sparked protests across the US.
Mr Sterling, 37, was shot outside a convenience store where he was selling homemade CDs.
The department's decision was not publicly announced but was reported by media including The New York Times and The Washington Post.
It does not preclude state authorities from conducting their own investigation and pursuing their own criminal charges against the two officers, Blane Salamoni and Howie Lake II.
Dozens of people gathered at a vigil on Tuesday night outside the store where Mr Sterling was killed, with people joining hands and praying.
"It's been almost a year and we're still suffering like it was yesterday," the victim's aunt, Sandra Sterling, said in a tearful speech to the crowd.
"We need closure. We need conviction. We need justice."
Videos showed Mr Sterling pinned to the ground as he struggled with the two officers after they responded to a claim that he had threatened someone with a gun outside the convenience store.
Gunfire erupted moments after someone yelled, "He's got a gun!"
According to a police report, Mr Sterling refused to put his hands on the bonnet of a car and was initially jolted with a stun gun.
The report also says the officers saw the butt of a gun in Mr Sterling's pocket and saw him try to reach for it before he was shot.
Protests escalated a day after the Louisiana shooting when a Minnesota police officer fatally shot another black man at a traffic stop, and his girlfriend streamed the video on social media.
Nearly 200 people were arrested in the protests that followed Mr Sterling's death.
The decision not to press charges is set to focus attention on new US Attorney General Jeff Sessions and his approach to civil rights after a series of deadly encounters have stoked the debate over policing and minorities.
Mr Sessions has said the Justice Department is committed to holding individual officers accountable when they break the law.
But he also believes too much federal scrutiny of police departments can diminish officers' effectiveness and hurt morale.