An FA investigation has been ongoing since last August after the emergence of a dossier detailing correspondence that contained racist, homophobic and sexist language.
Now, 11 months on, the governing body 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.
It has emerged the FA raised “serious concerns” with police during their investigation over the “circumstances in which particular evidence provided to the FA had been given and the reliability and completeness of that evidence.”
Sky Sports News HQ understands the police complaint did not relate to the conduct of Mackay and Moody.
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.
Kick It Out, which tackles issues of racism and discrimination within the game, has reacted angrily to the FA’s stance. Click here to read its statement in full.