No further action will be taken against a 32-year-old man arrested in connection with the explosion, police said.
A spokesman for Greater Manchester Police said: "The bail of the 32-year-old man who was arrested on suspicion of manslaughter has been cancelled by police."
Two year old Jamie Heaton died in the Buckley Street blast in June as he sat watching TV. Today a second man arrested appeared in court charged with manslaughter and causing £1.2 million of criminal damage.
Neighbour, 27 year old Andrew Partington was seriously injured in the blast and was recently woken from a coma to be interviewed by police.
A man has been charged with the manslaughter of a two-year-old boy in a suspected gas explosion which flattened a number of homes in Oldham.
Jamie Heaton died in the blast while watching TV in his home in Shaw on June 26.
Andrew Partington, 27, who was injured in the incident, has been charged with manslaughter and causing criminal damage.
Partington, formerly of Buckley Street, Shaw, suffered burns in the explosion in Buckley Street and was recently brought out of a coma.
The seat of the blast was at his rented terrace house, which was next door to the home of Jamie and his parents, Kenny and Michelle.
Following Jamie's death, they paid tribute to "our little man" who was "a happy, little boy, mischievous and full of laughter".
"I have today advised Greater Manchester Police to charge Andrew Partington with the manslaughter of Jamie Heaton, aged two, and causing criminal damage valued at over #1 million to houses in Buckley Street, Shaw, Oldham, on June 26 2012.
Police were called to the scene of a gas explosion in Buckley Street at around 11.15am where two houses, number nine and number 11, were destroyed in the blast and other homes damaged.
– Chief Crown Prosecutor for CPS north west area Nazir Afzal