AISLING Brady McCarthy "can't stop crying out of joy" after a murder charge against her was dropped, her lawyer has said.
The 37-year-old had been accused of killing a baby in her care in the US.
Her lawyer, Melinda Thompson, called the prosecution a "complete disgrace" and criticised a "rush to judgement".
Brady McCarthy, from Co Cavan, still faces an uncertain future because federal immigration authorities want to detain her.
Yesterday's announcement by prosecutors came after a state medical examiner reversed an earlier decision that said the child's death was homicide caused by shaken baby syndrome.
The District Attorney's office in Middlesex County, Woburn, Massachusetts. announced it had filed a court order to drop the charges, as it said there was no longer any proof to prosecute the accused.
"Based on an assessment of the present state of the evidence - including the amended ruling from the medical examiner who performed the autopsy - the Commonwealth cannot meet its burden of proof," District Attorney Marian Ryan said.
Rev Kevin Fay, the priest for Brady McCarthy's parish of Lavey, said people there were relieved that the charge had been dropped. "It's fantastic news, just fantastic news," he said.
"We all know the family very well. There's a sense of great relief for everybody," he added.
Local Cllr Val Smith said: "This is unbelievable. She has been in jail for more than two years now, and really she should not have been there at all."
Brady McCarthy was charged with the murder of one-year-old Rehma Sabir at the child's home in Cambridge, Massachusetts in 2013. She had been the girl's nanny for about six months.
She had insisted she was innocent and her lawyers vigorously challenged the medical examiner's findings that Rehma died of complications caused by blunt-force head injuries.
A review of the medical examiner's report into the baby's death resulted in the cause of death being reversed from homicide to "undetermined".
The amended ruling came after additional materials were reviewed, including expert witness reports, transcripts of police interviews and grand jury testimony, additional medical records and lab testing.
The report noted Rehma had a history of bruising and suggested she may have been prone to easy bleeding with relatively minor trauma because of an undiagnosed disorder.
"Given these uncertainties, I am no longer convinced that the subdural haemorrhage in this case could only have been caused by abusive/inflicted head trauma, and I can no longer rule the manner of death as a homicide," the medical examiner wrote.
"I believe that enough evidence has been presented to raise the possibility that the bleeding could have been related to an accidental injury in a child with a bleeding risk or possibly could have even been a result of an undefined natural disease.
"As such I am amending the cause and manner of death to reflect this uncertainty."
Speaking hours after the first-degree murder charge against Brady McCarthy was dropped, lawyer Melinda Thompson was scathing.
"It was a tragedy that a child died but, quite frankly, the way this prosecution was handled was a complete disgrace," Thompson said.
She added that Brady McCarthy hoped to rebuild her life and her credibility and hasn't ruled out legal action against the prosecutors.
"This was an absolute nightmare," Thompson said of her client's time in prison.
"It changes a person. She can't get those years back," she added.
Brady McCarthy travelled to the US about 13 years ago under a visa waiver program that entitled her to stay 90 days. She had been in prison since her 2013 arrest until May, when she was released on bail and ordered to wear a GPS monitor while awaiting an October trial.