An FA investigation has been ongoing since last August after the emergence of a dossier detailing correspondence that contained racist, homophobic and sexist language.
And 11 months later a statement has revealed neither man will be disciplined as “the communications were sent with a legitimate expectation of privacy”.
Mackay, who has since gone on to manage and leave Wigan, has already voluntarily attended equality and diversity training.
The statement read: “The FA has undertaken a thorough and detailed investigation in connection with inappropriate language contained within text messages and an email sent by Iain Moody, and text messages sent by Malky Mackay when they were employed by Cardiff City FC.
“The messages, sent between June 2011 and March 2014, were obtained by Cardiff City FC in March 2014. The FA first became aware of the messages in August 2014. The messages were provided in full to The FA in October 2014.
“To date, The FA’s policy in cases such as this has been to not bring charges in respect of private communications sent with a legitimate expectation of privacy.
“The FA’s investigation looked at all aspects of the communications, including the context in which the communications were sent. The evidence was then reviewed by a QC with particular expertise in sports’ disciplinary proceedings and employment law.
“Having assessed the evidence, and in light of the finding that the communications were sent with a legitimate expectation of privacy, The FA will not be taking disciplinary action against Iain Moody and Malky Mackay in connection with the content of those messages.
“However, The FA has spoken to both Iain Moody and Malky Mackay about the inappropriateness of terms used in the messages. Both individuals have acknowledged that such terms are not acceptable.”
The text messages in question were sent when Mackay was Cardiff manager and Moody their head of recruitment.
Both subsequently lost their jobs, Mackay getting the sack in December 2013 just six months after leading the club to the Premier League.
The FA were criticised over the length of time the investigation took but have stated concerns over how evidence was required are to blame.
The statement continued: “The FA has at all stages sought to conclude this matter as quickly and efficiently as possible. However, the investigation has been lengthened considerably due to serious concerns about the circumstances in which particular evidence provided to The FA had been given and the reliability and completeness of that evidence.
“The nature of these concerns, which The FA treats with the utmost seriousness, has necessitated significant further inquiries by The FA and the liaison with external law enforcement agencies.
“The FA reserves the right to open further investigations if deemed appropriate. No further comment will be made in this respect.”