But the Court of Appeal last year quashed her conviction and then granted her bail ahead of another retrial, the fifth one in total.
Elia Abdelmessih was found dead in his Kew East home in 2005.
On Monday, prosecutor Angela Ellis told the Supreme Court the charge of murder would be discontinued against Ms Pyliotis, whose lawyers were seeking a permanent stay to prevent a fifth trial starting.
Justice Elizabeth Hollingworth said the move was “a very sensible suggestion given the way the evidence has been coming out”.
At pre-trial hearings in recent months, a former homicide detective was questioned about confessions made by another woman, Susan Reddie, who had a sexual relationship with Mr Abdelmessih. Ms Reddie died of natural causes in 2012.
The hearings were told Ms Reddie recanted her confession to killing Mr Abdelmessih, however the police officer’s diary, which was found last year, contained details of more confessions made by Ms Reddie.
Ms Pyliotis spent almost four years in custody from her arrest in 2016 until she was granted bail last year.
In 2005 she was a worker at the McDonald’s store where Mr Abdelmessih, 69, was a regular customer.
The Court of Appeal, which quashed Ms Pyliotis’ conviction last year, was critical of negative comments trial judge, Justice Paul Coghlan, made about the defence argument that Ms Reddie was the killer.
Justice Coghlan labelled the defence’s argument that Ms Reddie was the killer as a “red herring calculated to mislead”, and labelled some of a defence lawyer’s questioning of a witness as “boring”.
