"The state government has decided not to take disciplinary action against the three police officials who initiated the ISRO spy case," Chief Minister Oommen Chandy said in a written reply in the assembly on Friday.
The case pertaining to alleged transfer of secret documents on India's space programme to foreign countries by two scientists and four others, including two Maldivian women, was first investigated by a Special Investigation Team.
It was later handed over to CBI, which found no espionage as alleged had taken place.
Chandy said CBI has mentioned the names of Sibi Mathew (former ADGP and now state Chief Information Commissioner), K K Joshua (then Superintendent of Police) and S Vijayan (then Circle Inspector) and government has decided not to take disciplinary action against them.
On whether the government plans to give any compensation to the Maldivian women involved, Chandy said "it is not under the consideration of the government".
The government's decision not to proceed against the three police officials as recommended by CBI while closing the case had also triggered a debate on the issue.
The agency had recommended action against them for "unprofessional conduct of enquiry into the case".
The Kerala High Court had in November ordered the government to pay Rs 10 lakh interim compensation to Nambi Narayanan, an ISRO scientist, for falsely implicating him in the case.
Chandy had said the government would look into the demand of former KPCC president K Muraleedharan, son of veteran Congress leader late K Karunakaran, to take action against these officers.
Karunakaran had to resign from the post of Chief Minister after a section of Congress leaders came out against him accusing him of shielding an officer allegedly involved in the case.