Panamanian authorities have ordered the release of 32 of the 35 North Koreans detained since July after an undeclared cargo of Cuban arms was found on their ship as it tried to enter the Panama Canal.
Prosecutor Nahaniel Murgas said the captain and two other crew members will remain to face arms trafficking charges because they knew the weapons were on board.
Earlier this month, Panamanian officials said North Korea had agreed to pay a $666,000 fine for release of the crew and ship.
Havana and Pyongyang say the weapons aboard the freighter, Chong Chon Gang, were obsolete Cuban arms being shipped to North Korea for refurbishment under a legitimate contract.
Panama said the shipment violated the United Nations arms embargo against North Korea. The U.N. has yet to make an official determination on the shipment.