Hobart Lord Mayor Anna Reynolds has been cleared of an alleged assault charge.

The charge - made against Reynolds by now-councillor Louise Elliot - was dropped after a thorough review of the case file by the Police Department's Principal Legal Officer.

The incident in question reportedly took place at a meeting in May last year, which was held to discuss the University of Tasmania's move into the Hobart CBD. 

Ms Elliot claimed that during the meeting, Mayor Reynolds grabbed her left bicep, pulling her down towards her face while continuing to apply pressure to her arm.

In response to the charge, the Mayor had previously denied any unlawful conduct and expressed her disappointment that the police had charged her with a summary offence. 

She stated that she would vigorously defend the allegation and that the charge did not impact her eligibility to remain on the council and as Lord Mayor.

However, following a review of the case, the police decided to discontinue the charge of common assault against Mayor Reynolds. 

The review included the consideration of additional witness statements, and it was determined that the matter should not be pursued further.

The decision comes as a relief for Mayor Reynolds, who says she has faced intense scrutiny and media attention since the charge was first laid. 

Her supporters have praised the decision, stating that justice has been served, and that the Mayor can now focus on continuing her work for the Hobart community.