The decision is the latest, and possibly final, chapter in a week-long legal saga that saw the desperate parents of a critically-ill boy briefly go to jail for removing him from a British hospital against medical advice.
The move triggered in international manhunt and dominated British news, with public opinion shifting from outrage to sympathy as it became clear parents Brett King, 51, and his wife Neghemeh King, 45, had taken their son abroad to avoid treatment they believed would turn him into a "vegetable".
I welcome the prosecution against #AshyaKing's parents being dropped. It's important this little boy gets treatment & the love of his family— David Cameron (@David_Cameron) September 2, 2014
Ashya, whose condition is now stable, could not be moved from hospital in Spain until his status as a ward of court, imposed after his parents were arrested, was lifted.
"There was a hearing this afternoon and the judge has said he is allowing Ashya to be flown to Prague," said Michael Duncan, a spokesman for the Courts and Tribunals Judiciary in London.
"The court's wardship over him will cease when he arrives at the hospital" in Prague, he added.
It was not immediately clear when the five-year-old would be flown to Prague to receive proton beam therapy. The Proton Therapy Centre In Prague has previously said it was ready to treat Ashya, but that he would need to go back to England first to undergo two cycles of chemotherapy.
The centre has also said it is ready to send a plane to transport him as soon as possible.
Ashya recently underwent surgery for a brain tumour in Southampton, in southern England, but his parents took him from the hospital there after disagreeing with his treatment.
Doctors treating Ashya said they had raised the alarm out of "absolute medical concern" because they feared his health would deteriorate, triggering the parents' arrest on Saturday and subsequent four-day detention in a Spanish jail.
The decision to allow the boy to go to Prague for alternative therapy was made by High Court Judge Jeremy Baker following a telephone hearing with Ashya's family earlier on Friday.
The Kings' legal troubles prompted an outpouring of public support in Britain, where tens of thousands of people signed a petition calling for the boy to be reunited with his parents.
Prosecutors had suspected the parents of "cruelty," but the British Crown Prosecution Service withdrew the warrant, saying Ashya appeared to have been properly looked after. A Spanish judge then released them from jail in Madrid.
The case even gained the attention of British Prime Minister David Cameron, who upon learning that the case against the Kings had been dropped, tweeted:
"It's important this little boy gets treatment and the love of his family."