The peer thanked political colleagues for their "unfailing support" after the allegations were made earlier by women party activists.
Scotland Yard said there was insufficient evidence to support a prosecution against the 52-year-old.
He was accused of behaving inappropriately towards a number of women in the party but repeatedly denied any wrongdoing.
Lord Rennard said: "I am not surprised by the police decision that after a full investigation into the complaints made against me I will face no charges. The last eight months have been harrowing and deeply unpleasant for me, my wife Ann, my family and friends.
"I am enormously thankful for the unfailing support I have received from people across the political spectrum but especially those within the Liberal Democrats who have stood by me throughout.
"My life's work has been to support good people and good causes. I hope now to be able to continue doing that."
Deputy Prime Minister Nick Clegg and Treasury Chief Secretary Danny Alexander, a Highland MP, and Equalities Minister Jo Swinson, MP for East Dunbartonshire, were sharply criticised in a review into the party's handling of the complaints.
Businesswoman Helena Morrissey, who conducted the inquiry, said a formal investigation should have been launched when his alleged victims first came forward.
A number of woman activists and party workers had made allegations of unwanted advances, but when they reported the claims little action was taken by the party.
The peer will now face an internal party discipline inquiry into his conduct