The decision was reached because "we were unable to meet our burden of proof," Cook County state's attorney spokesman John Gorman said.
Coyne, 36, of the Tinley Park suburb, was arrested Dec. 8 after a Crestwood Police Department community service officer spotted the toddler alone in Coyne's vehicle.
"I feel good and I feel a little bit more empowered now," said Coyne, who faced a maximum sentence of one year in jail and a fine of $2,500 had she been convicted. "And I feel relief."
Her husband was also relieved -- and angry.
"We shouldn't have had to fight this long and this hard when my wife never did anything wrong," said Timothy Janecyk. The way the case ended, he said, "only shows they tore my family apart for no reason."
Coyne, who was arrested in a loading zone near the entrance of a Wal-Mart store, contended 2-year-old Phoebe, who was sleeping, was safe inside the car after she locked it, activated the alarm system and turned on the emergency flashers.
She said she was never more than 30 feet from the vehicle, did not step inside the store and was gone for only minutes. And her attorney said because the car was always in sight, Coyne's daughter never was unattended.
Crestwood Police Chief Timothy Sulikowski said he strongly disagreed with the prosecutors' decision.
"We stand by the actions of our officers that night and they were looking out for the best interests of the child," he said.
Sulikowski said that while police were obligated to report the case to the state's child welfare agency, Coyne would not have been arrested had she cooperated and not refused to give them basic information, including the child's name.
Coyne has acknowledged she did not tell officers her child's name after she called her husband on her cell phone and he told her not to say anything until he arrived. She said she was afraid and only wanted to wait for her husband, but police arrested her before he did.
The Illinois Department of Children and Family Services also investigated and determined there was no credible evidence of abuse or neglect.
Coyne's case garnered international media attention. Scores of bloggers also weighed in online message boards, some of them blasting the police for overstepping their authority and others taking her to task for leaving her child, however briefly.
Her husband said she had to endure allegations that she endangered her child's life and the stigma that she was an unfit mother.