Leon James Shackleford, 63, fronted the Adelaide Magistrates Court on Wednesday morning, where he pleaded not guilty to the offence.
It had been alleged the assault took place between May 1 and July 31 in 2019 in Adelaide.
The charge was aggravated because Mr Shackleford had abused a position of authority in committing the alleged offence, the court heard.
Further details of the allegation had not been made public.
The matter was listed for a two-day trial, but, in a surprise development, a prosecutor said no evidence would be put before the court.
Magistrate Simon Smart then dismissed the charge and told Mr Shackleford: “you’re free to go”.
Shackleford, of Morphettville, was arrested last June but his name remained secret until September, after his lawyer argued details of the case should be suppressed while police determine their final charge.
Police had also argued his name and image should remain suppressed while two potential other complainants were interviewed.
He made no comment to reporters as he left court with his legal team on Wednesday.