According to the Christian Legal Centre, 62-year-old Pastor Oluwole Ilesanmi had been charged with an "Islamophobic" hate crime after preaching a sermon 24th June 2017.
The legal group said a Muslim and two political activists pressed charges when he preached against the Quran, accusing him of preaching lies and of being Islamophobic.
The Christian Legal Centre said the pastor responded that the Bible speaks the only truth and that "people need to give their lives to the Lord Jesus".
Ilesanmi was charged by police under Section 5 of the Public Order Act for using threatening or abusive words or behaviour or disorderly behaviour within the hearing or sight of a person likely to be caused harassment, alarm or distress which was racially aggravated.
A solicitor argued in a written submission on behalf of Ilesanmi that the law provides the freedom for him to preach the Christian message.
The charity said the Crown Prosecution Services have decided to discontinue the charge prior to trial.
In response to the decision, Ilesanmi said: "I am in the United Kingdom to bring back the true message of the gospel that Christians many years ago brought to Nigeria.
"I have seen first-hand what sadly many Christians have suffered in Nigeria first-hand.
"It is ironic that I was accused of exactly what the Muslims are doing in my country and so many other countries around the world.
"When will the UK wake up and realise that submission to Islam is not the answer, that only the Lord Jesus Christ is the answer to the UK's problems?"
He added that he's not a hate preacher and "the most loving thing that a preacher can do is tell people the truth..."
The Christian Legal Centre has urged police to "educate their officers so that innocent Christians don't continue to be arrested".