Oster, 26, currently on loan at Elland Road from Sunderland, was arrested on suspicion of assault after an incident outside Studio nightclub in Durham City.
He will face no further charges after the alleged victim refused to press charges. The incident happened at around 12.40am on Thursday.
A 29-year-old was also arrested and has been released on bail until January 20, pending further inquiries, say police.
Officers were called to the scene after the fight was observed by CCTV operators, Durham police said.
It remains to be seen how Leeds will deal with the matter.