Dubai's Attorney General says the British mother supposedly detained over a glass of wine was in fact held over a passport row in which she verbally abused an immigration officer.
Dr Ellie Holman was released with her 4-year-old daughter after a hellish stint in jail.
The dentist from Sevenoaks in Kent was pictured with her 8-year-old son, Noah, yesterday after they were reunited, reports Daily Mail.
She spent three days locked up in the Arab state and received an apology from the government for the detention.
But Dubai's Attorney General Issa Al Humaidan said the row started with an expired passport, The Sun reports, and ended with her using 'profanity' and photographing an official in a restricted area.
"She was advised by the immigration officer that she could not enter the country with an expired passport," he said Issa Al Humaidan. "She then produced an Iranian passport, and was informed by the officer that she could enter the country by issuing a new temporary visa, which allowed a 96-hour stay, and had to change her departure flight according to the new visa."
She was told in a telephone call today that she can leave at any time and will not face any charges. The Dubai Government have also said they will pay for the flights home.
The 44-year-old was with her two eldest children who had flown out to Dubai for a visit when she received the news and said she was 'ecstatic.'
She told MailOnline: "I can't believe this is over. When I got the call from the government telling me they were dropping the case I was in shock.
"I was told to prepare for a long stay in Dubai and a prison sentence. The man on the phone apologised on behalf of the immigration official who put me and Bibi through all of this. I feel like a weight is off my chest."
The mother-of-three from Sevenoaks, Kent, is hoping to be home on the first available flight accompanied by her visiting children Suri, 9 and Noah, 8.
"I can't wait to be safely on my flight with Noah and Suri, and to put all this behind us," she said.
Dr Holman's release came after the personal intervention of Dubai's ruler Sheikh Mohammed, according to sources in the UAE.
He is said to have ordered her release after MailOnline's coverage of her ordeal and treatment was covered by media worldwide.
Dubai, which attracts over 14 million visitors each year, is heavily dependent on tourism.
The publicity about Dr Holman's arrest for drinking a glass of wine could have had a deterrent effect on future travellers.
The dramatic twist came just 48 hours after MailOnline exclusively revealed how the mother-of-three was arrested at Dubai airport following a row with an immigration official over her visa.
During dispute over her visa Dr Holman was asked if she had any drunk any alcohol.
She admitted she was served wine by the cabin crew on the Emirates Airlines flight and was told consumption of alcohol was illegal in the UAE.
She said: "I have never broken the law in my life and I would not have done so this time if I had known that having a glass of wine in my system was an offence.
"I can't believe Emirates Airline would give a glass of wine to a passenger if they know the consequences are so severe in Dubai."
DR Holman told MailOnline how the dispute over her visa quickly escalated with a "rude and aggressive" immigration officer.
As her single entry visa has expired he demanded she fly back to London immediately.
When Dr Holman refused as she and her daughter were tired from the long flight there followed a tense standoff.
It was then the immigration officer asked if she had been drinking and she admitted to having a glass of wine with her meal during the eight hour flight.
Despite her protestations, she was marched off to a holding cell where her daughter was forced to urinate on the floor as guards would not let her use a toilet.
After being held for several hours Dr Holman provided a blood sample to Dubai authorities which came back with a reading of 0.04% - well under the UK drink drive limit.
With no legal representation and not allowed to speak with her family she and Bibi were taken to an airport detention centre where they spent three days.
They were held for three days in a "baking hot and foul smelling" room and she was forced to clean toilets and mop the floor.
With her traumatised daughter too terrified to leave her side she was forced to sleep in a canteen area where the lights were kept on 24 hours a day.
During their detention the pair did not eat and Dr Holman said she was unable to sleep during her enforced stay.
"The food smelled like rotting garbage and neither Bibi or I could face trying it. I stayed awake for the whole three days," she said.
She claims they were also denied a pillow or a change of clothing She said Bibi was in a state of shock and refused to be comforted.
After her release Dr Holman was allowed to stay with friends but her passport was confiscated and she was told it could be up to a year until the matter is resolved.
Her partner Gary flew from their home in Kent to Dubai to collect their youngest daughter.
The couple estimate they have lost over £30,000 in earnings and money spent on legal fees.
Since her arrest Dr Holman's practice in Sevenoaks has been closed.
Dr Holman's ordeal was taken up by the NGO Detained in Dubai.
Its CEO Radha Stirling told MailOnline: "We welcome the intervention of the Dubai government to dismiss the case against Dr Ellie Holman. This is an appropriate response to the international outrage over what she and her daughter suffered.
"We would reiterate, however, that a single instance of intervention does not resolve the ongoing issue of Dubai's confusing policy on drinking."
Radha Stirling, CEO of Detained in Dubai, said: "The government of Dubai owns Emirates Airlines, and Emirates Airlines provides alcohol to international passengers free of charge, thereby essentially entrapping them into breaking UAE law as soon as their flights land.
"Dr Holman accepted a complimentary drink, and was then punished for that by the same government who provided it; and there is every reason to expect this to happen again.
"Dr Holman was handcuffed and ill-treated in detention, and her four year old child is still traumatized by what she and her mother endured. They have every right to compensation for their suffering.
"We continue to strongly advise travelers to avoid the UAE, as it remains the number one destination where foreigners are most likely to face legal problems.
"The dismissal of Dr Holman's case does not change the laws, does not change the policies, and does not mitigate the risks faced by anyone traveling to or through the UAE."