Gary McKinnon, who suffers from Asperger's syndrome, admitted to hacking US government computers in 2001 and 2002.
US authorities said McKinnon caused damages up to $800,000 but McKinnon denies the claims saying that he was only looking for evidence of UFOs.
The 46 year old Londoner has been fighting extradition to the U.S. since he was arrested in 2002. In 2006 an order for his extradition to stand trial in the United States was made.
McKinnon had said that he wanted to stand trial in the UK but the Crown Prosecution Service claimed that the US had jurisdiction.
However, Psychiatrists informed May that it was likely McKinnon would become suicidal if extradited to the U.S. If he had gone and was found guilty, McKinnon could have faced up to 60 years in a US prison.
May told Parliament that even though McKinnon is accused of serious crimes there was "no doubt that he is seriously ill; he has Asperger's Syndrome and suffers from depressive illness."
"After careful consideration of all of the relevant material I have concluded that Mr McKinnon's extradition would give rise to such a high risk of him ending his life that a decision to extradite would be incompatible with Mr McKinnon's human rights," said May. "I have therefore withdrawn the extradition order against Mr McKinnon."
McKinnon's MP, David Burrowes, had threatened to resign from the government if the extradition was allowed to go through.
The decision comes after several UK citizens have been extradited to the U.S to face trial for charges that would not be considered crimes in the UK or would only be a minor offence.
"We're delighted that the years of waiting are final over for Gary and his family," said Mark lever, chief executive of the National Autistic Society. "People with Asperger syndrome can be vulnerable and the NAS argued long and hard for the Home Secretary to take Gary's condition and its associated challenges into account when making this decision. A decade is a long time to wait...May's decision has finally put an end to a difficult chapter."
According to the BBC, the director of public prosecutions will determine if McKinnon should face trial in the UK.
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