A spokeswoman for Ms Higgins confirmed she had been admitted to hospital after an "unrelenting" few years since she went public with her allegations.
Bruce Lehrmann was charged with sexual intercourse without consent and had been awaiting a new trial in the ACT Supreme Court after juror misconduct derailed the first.
Ms Higgins alleged Lehrmann raped her in March 2019 inside the office of former Liberal defence industry minister Linda Reynolds, when they both worked there as staffers.
He has denied the allegation and maintained the pair never had any sexual interaction.
Defence lawyer Steven Whybrow refused to provide a comment about the prosecution not going ahead with the planned retrial.
He told reporters it would not be appropriate for him to speak at this time.
ACT Director of Public Prosecutions Shane Drumgold said he received "compelling evidence" about the effects of another trial on Ms Higgins' mental health.
"I have recently received compelling evidence from two independent medical experts that the ongoing trauma associated with this prosecution presents a significant and unacceptable risk to the life of the complainant," he said.
Mr Drumgold said he still held the view that there was a reasonable chance of conviction, but he would not go ahead with a prosecution.
"Whilst the pursuit of justice is essential for both my office and for the community in general, the safety of a complainant in a sexual assault matter must be paramount," he said.
"I have made the difficult decision that it is no longer in the public interest to pursue a prosecution at the risk of the complainant's life."
Mr Drumgold noted Ms Higgins had faced "a level of personal attack" that he had not seen in more than 20 years in the legal profession.
"She has done so with bravery, grace and dignity and it is my hope that this will now stop and Ms Higgins will be allowed to heal," he said.
Emma Webster, a close friend of Ms Higgins, said the past few years had been "difficult and unrelenting" and confirmed she was in hospital receiving treatment and support.
"While it's disappointing the trial has ended this way, Brittany's health and safety must always come first," Ms Webster said.
Foreign Affairs Minister Penny Wong noted Mr Drumgold's comments about Ms Higgins' health.
"I want to echo the prosecutor's comments recognising the grace, the bravery and the dignity that Ms Higgins has displayed," she said.
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