|Angry villagers gather at the tree where the girls were found hanged in Badaun district|
The announcement came after months of inquiry by the Central Bureau of Investigation following global outrage.
Three men arrested in connection with the case in northern Uttar Pradesh state were freed on bail in September.
It is unclear why the girls might have taken their lives. Correspondents say there are many unanswered questions.
Women's rights activists say they are not happy with the latest findings and are urging the CBI to continue investigating.
The lower-caste cousins, thought to have been 14 and 15, were found hanged from a mango tree in Badaun district on 28 May.
The fact that there has been little explanation about the motive has led many people to question the findings of the CBI.
"CBI has tried to fudge the case and save the accused from the very beginning," Sohan Lal, father of one of the girls, told BBC Hindi.
"I am very angry with their decision. The team did not show any promptness while investigating the case."
'Forty scientific reports'
The girls went missing after apparently going outside to relieve themselves during the night as they had no toilet at home.
|This May 12, 2006 file photograph shows a slum resident (L) as he uses a |
toilet that opens into the water below as children swim in the water.
Nearly half-a-billion Indians lack access to basic sanitation
But forensic tests conducted since then have concluded the girls were not sexually assaulted, the Central Bureau of Investigation (CBI) said.
"Based on around 40 scientific reports the CBI has concluded that the two minor girls in the Badaun case had not been raped and murdered as had been alleged in the FIR [first information report]," CBI spokeswoman Kanchan Prasad said on Thursday.
"Investigation has concluded that it is a case of suicide."
More details are due at a news conference later on Thursday.
Analysis: Geeta Pandey, BBC News, Delhi
The latest CBI revelations are baffling and many will not believe them.
It was initially believed that the two lower-caste girls were gang raped and hanged by young men from a slightly higher caste. A post-mortem carried out on the bodies by a team of three local doctors said the girls had injuries "suggestive of rape".
In August, the CBI had the clothes, vaginal swabs and other personal effects of the girls and the three accused men tested - and came up with the startling revelation that the cousins had not been sexually assaulted at all.
It was also suggested the murders could be a case of "honour killing" by relatives. The CBI chief's latest statement that the girls took their own lives "because of family pressure" over their friendship with a villager has added a further twist.
In just six months, there have been three different theories about how the teenagers died and each theory has raised more questions than it has answered. How the investigators arrived at a verdict of suicide is as yet unclear.
Indians are now beginning to wonder whether they will ever know what actually happened on the night the two girls brutally died.
Earlier, CBI chief Ranjit Sinha told the Hindustan Times newspaper they had "cracked the Badaun case".
"The local police had erroneously conducted their probe along the lines that the sisters were killed," he said.
Correspondents say the story of the hangings has become murkier and murkier over the past few months, with officials raising questions over the testimony of the victims' families, accusing them of failing lie-detector tests.
Investigators also raised doubts about the credibility of the main witness, a neighbour of the girls, amid reports that he had been paid money by their families.
It also became clear that the CBI did not trust the original local police investigation.
In September a court bailed the three accused after federal investigators refused to charge them, citing a lack of evidence.
Two constables, who were also arrested along with the accused and charged with dereliction of duty and criminal conspiracy for not taking the parents' complaint seriously, were also bailed in September.
Federal investigators have said the clothes and personal effects of the girls were examined by the Centre for DNA Fingerprinting and Diagnostics (CDFD) in Hyderabad and it found no proof of sexual assault.
Did it find proof that the girls climbed a huge tree and climbed way out onto the branches they were found hanging from? There should be lots of bark or other wood fibres on their clothes. Was there? How else could they hang themselves from a tree?
They were found a good 6 to 10 feet off the ground with nothing nearby for them to climb on except the tree itself. So if they jumped from the branches with a noose around their necks, their necks would have been severely broken; were they? Were they broken at all or did the girls die from asphyxiation? A minor break and death from asphyxiation would, in my opinion, be a clear indication of murder, that the girls were lifted off the ground by the rope around their necks.
Was there a cover-up here from the start? Were the clothes sent to forensics actually the clothes the girls were wearing or could they have been switched? I really don't like the smell of this. Before I believe that these girls committed suicide and were not raped, I want to hear from the doctors who originally examined them, I want motive, and I want someone to explain how it is possible to hang yourself from such a huge tree.