"The [Director of Public Prosecutions] has decided to terminate these proceedings by virtue of her constitutional powers. Therefore, you're hereby discharged," high court judge Charles Chanda said.
The Nolle prosequi is often used in Zambia against perceived political enemies so that they neither claim compensation nor sue the state for unlawful detention, while the state would have succeeded in punishing them for their alleged crimes without any trial.
The opposition leader’s arrest in April was a result of what transpired when the two men had travelled to Barotseland for the national Ku-o-mboka water festival in which Mr Hichilema was accused of endangering President Lungu's life after his motorcade allegedly refused to give way to the one transporting the Zambian embattled head of state.
Days later, more than 100 armed police surrounded Hichilema's house outside Lusaka, firing tear gas before detaining him and his aides.
The businessman turned politician, Hichilema claimed he and members of his family were heavily assaulted by the police during his arrest and suffered mistreatment in detention.
Mr Hichilema was due to stand trial over what was widely seen as politically motivated treason charges, which he and his co-accused vehemently denied, but instead walked free from Lusaka's high court after more than 100 days in maximum prison custody.
Sources say the charges against Mr Hichilema and five aides were dropped after a deal was negotiated by the Commonwealth.
Mr Hichilema, narrowly lost the bloody August 2016 polls to Mr Edgar Changwa Lungu amid accusation of massive electoral fraud.
As such, the leader of the opposition United Party for National Development (UPND) rejected the vote as ‘fixed’, and does not recognize Mr Lungu as president after the Constitutional Court refused to hear his electoral petition on a technicality.
Mr Lungu, meanwhile, faces accusations of growing authoritarianism, especially when he invoked emergency powers in July, increasing police powers of arrest and detention after he blamed the main opposition party for a string of 'arson' attacks.
The Lungu led government is also accused of pressuring media outlets that support the opposition, arrests of citizens with divergent views and denial of other civil liberties, eroding Zambia's reputation as a 'stable' democracy.
In Zambia, the charge of treason carries a sentence of at least 15 years. Those found guilty can also be sentenced to death.
But all charges have now been dropped, apparently after a visit by Commonwealth Secretary General Patricia Scotland, who was in Zambia last week, and met Mr Lungu and Mr Hichilema.
She later hinted Mr Hichilema could be released in the public interest.