Virgin Active confirmed on Thursday that they withdrew the case against the 18-year-old suspect who went viral after he was filmed allegedly masturbating on camera while at the gym.
The incident sparked outrage nationally after the video was posted on Twitter.
The suspect was due to appear in the Stellenbosch Magistrate's Court on Thursday after the gym laid charges of sexual assault a month ago.
The man has also been banned from the gym for life.
Virgin Active South Africa confirmed that it has approached the authorities in order to withdraw the case against a member caught on video with his hands down his pants in its Stellenbosch health club.
The NPA are, however, likely to set specific conditions that the suspect will be required to meet related to the withdrawal of the charges.
Virgin Active spokesperson Carla White explained: ‘’We took immediate action when we were presented with the video, identifying and banning the member for life.
"What he did was wrong, however we are of the opinion that psychological help may be more appropriate than criminal sanction. We have an undertaking from his lawyer and family that he is receiving counselling and will continue with this course of therapy.
"We believe this is the most balanced way to deal with the situation."
White said the gym is aware of the outcry surrounding the incident from various interest groups.
"Our clubs are shared spaces, and we took action in accordance with our rules, which are in place to make our clubs safe places for training. We cannot control the behaviour of individuals, but we can take action when their behaviour contravenes our rules. Our sanctions are applied uniformly, regardless of age, race or religion."