The announcement came after months of inquiry by the Central Bureau of Investigation (CBI) following global outrage.
Three men arrested in connection with the case in northern Uttar Pradesh state were freed on bail in September.
It is unclear why the girls might have taken their lives. Correspondents say there are many unanswered questions.
Women’s rights activists say they are not happy with the latest findings and are urging the CBI to continue investigating.
The lower caste cousins, thought to have been 14 and 15, were found hanged from a mango tree in Badaun district on May 28.
They went missing after apparently going outside to relieve themselves during the night as they had no toilet at home.
A local post-mortem examination initially confirmed multiple s**ual assaults and death due to hanging.
However, forensic tests conducted since then have concluded the girls were assaulted, the CBI said.
“Based on around 40 scientific reports the CBI has concluded that the two minor girls in the Badaun case had not been raped and murdered as had been alleged in the FIR [first information report],” CBI spokeswoman Kanchan Prasad said on November 27.
“Investigation has concluded that it is a case of suicide.”
More details are due at a news conference later on Thursday.
Earlier, CBI chief Ranjit Sinha told the Hindustan Times newspaper they had “cracked the Badaun case”.
“The local police had erroneously conducted their probe along the lines that the sisters were killed,” he said.
Correspondents say the story of the hangings has become murkier and murkier over the past few months, with officials raising questions over the testimony of the victims’ families, accusing them of failing lie-detector tests.
Investigators also raised doubts about the credibility of the main witness, a neighbor of the girls, amid reports that he had been paid money by their families.
It is also became clear that the CBI did not trust the original local police investigation.
In September a court bailed the three accused after federal investigators refused to charge them, citing a lack of evidence.
Two constables, who were also arrested along with the accused and charged with dereliction of duty and criminal conspiracy for not taking the parents’ complaint seriously, were also bailed in September.
Federal investigators have said the clothes and personal effects of the girls were examined by the Centre for DNA Fingerprinting and Diagnostics (CDFD) in Hyderabad and it found no proof of assault.
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