The victim, aged in her 70s, was taken to Royal Preston Hospital with serious injuries after she was found with a head injury on the cycle path close to Ovangle Road, near Asda, at 7.30am on April 5.
She had been walking her dogs when she was attacked.
Following a public appeal, police arrested the 32-year-old man on suspicion of assault.
He had been released on bail until May 5, and police have now confirmed no charges are being brought.
The attack followed an assault on a 52-year-old Lancaster mum in February, who was left in a coma for five weeks after being attacked as she walked home from Asda.
No charges have been brought by police in relation to this incident either.
Concerned resident Luke Edmondson launched a petition calling on the council to install CCTV along the route to improve safety.