Patrick Vieira's Under-21 side were in Novigrad, Croatia for a pre-season friendly and things threatened to spill over when 19-year-old midfielder Seko Fofana was dismissed for lashing out at an opponent.
Fofana, now on loan at Fulham, was allegedly the target of racist abuse from Rijeka players just a few moments before his sending off.
In response to the abuse and subsequent sending off, Vieira instructed his players to leave the pitch, with City lodging an official complaint.
However, FIFA confirmed on Monday that no action will be taken against the Croatian club due to a lack of evidence available to the investigating committee.
A FIFA spokesman said: "The chairman of the FIFA Disciplinary Committee considered that, based on the information at his disposal, there were not enough elements to justify the opening of disciplinary proceedings.
"Also in relation to this matter, the chairman was pleased to observe that Mr. Davor Suker [president of the Croatian Football Federation] and Mr. Patrick Vieira engage positively to work through the issue.
"The relevant parties were notified on Friday, 5 December in the form of a letter, which also emphasised FIFA's zero-tolerance stance against any form of discrimination."
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