Malaysia’s Attorney General Mohamed Apandi Ali said Ri Jong-chol was “a free man” as there was “insufficient evidence to charge him”.
Kim Jong-nam died on February 13 minutes after being poisoned with VX nerve agent.
Two women were charged with his murder on March 1.
Malaysia is seeking to question several North Koreans, including an embassy official, suspected of being involved in the murder.
Also on March 2, Malaysia announced it was ending visa-free travel for North Koreans, citing security reasons.
North Koreans can currently visit Malaysia for up to 30 days without securing a visa, under a reciprocal deal.
However, Deputy PM Ahmad Zahid Hamidi has said that is changing as of March 6, the Bernama state news agency reports.
Doan Thi Huong from Vietnam and Siti Aisyah from Indonesia are accused of smearing the nerve agent on Kim Jong-nam’s face while he was preparing to fly out of the budget airport in Kuala Lumpur.
Ri Jong-chol, who has lived in Malaysia for the last three years, was arrested four days later. Police did not provide details on why he had been detained.
On March 2, officials said Ri Jong-chol will be deported because he does not have valid travel documents.
Reuters reported that the North Korean held a work permit that was valid till February 6, 2017.
Diplomatic ties between North Korea and Malaysia were initiated in the 1970s, and as trade in resources such as palm oil and steel increased, North Korea eventually established an embassy in Kuala Lumpur in 2003.
However, Kim Jong-nam’s death has converted this relationship into a full-blown diplomatic rift, with Malaysia even recalling its ambassador from Pyongyang.
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