The 27-year-old was found to have an abnormally high level of testosterone in his blood during a routine drugs test before this year's Tour de France.
He was sacked by the T-Mobile team during the Tour and earlier this month confessed in German magazine Der Spiegel to having used banned-blood booster erythropoietin since 2003.
The Bonn resident has agreed to pay an undisclosed five-figure sum to charity, but will face no further legal action.
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"Mr. Sinkewitz has already been sufficiently punished by the loss of his job and other sources of income," chief state prosecutor Friedrich Apostel told German agency SID.
"In addition, he has co-operated with the investigation and has given valuable statements about doping practices in professional cycling."
Apostel added the decision had been made as Sinkewitz still faces "substantial financial demands from his former employer and from sponsors, as well as facing a long ban" from the German Cycling Federation.
Sinkewitz recently spent five hours giving evidence to a BDR disciplinary committee in a bid to have his expected two-year ban reduced.
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