Technology millionaire Doug Richard, 57, who appeared in the BBC show in 2005 and famously failed to invest a penny in its second series, was arrested in January.
The American-born businessman was today charged with three counts of sexual activity with a child and one count of causing or inciting a child to engage in sexual activity.
Crown Prosecution Service lawyer Caroline Hughes said: 'We have concluded that there is sufficient evidence and it is in the public interest for Douglas Richard to be charged.
'The alleged offences occurred on 2 January 2015 and relate to one victim aged 13 at the time.
'Mr Richard will appear before City of London Magistrates' Court on October 5'.
Today the married father-of-three said in a statement: 'I absolutely deny the charges against me and will contest this matter in court'.
Richard made his fortune in the 1990s, buying and selling software firms in his native California, before moving to Britain in 2001.
He was one of the original Dragons, but left the BBC show in 2005 after failing to make any investments in the second series. He remains the only Dragon not to invest throughout a series.
Later he said he needed to attend to his businesses, with filming for the BBC show taking up too much time.
In 2008 he served was chairman of the Tories' Small Business Task Force, advising George Osborne and David Cameron while they were in opposition.
|Osborne and Richard|
|Queen meets dragon|
The US-born businessman has worked closely with Mr Cameron over several years.
In 2011 he went on an official Government trip to Africa and also worked as an adviser to Chancellor George Osborne.
He then founded School for Start Ups which describes itself as creating 'education programs events and online support for budding entrepreneurs', and works in partnership with leading UK Universities, the Royal Institution and the British Library.
The company has made visits to business schools and universities across the country, and offers loans of up to £25,000 to aspiring entrepreneurs.
In a recent interview with the Californian he spoke of how British people were 'polite to a fault', and criticised programmes such as The Apprentice as creating a false image of the business world.
He said: 'Unfortunately, I think it [the Apprentice] represents all the worst in business. It's not the way I run my company. It's not the way I treat my staff.
'It's not the way I expect an entrepreneur to act.'
|Richard (back row, left) with cast of 2005 Dragon's Den|
He was also awarded an Honorary Doctorate of Business from Plymouth University in 2013 and in November it was announced that he was to be the next chancellor of Teeside University - a role he was due to start earlier this year.
Announcing his appointment, outgoing chancellor Lord Sawyer of Darlington said: 'I am sure that Doug Richard will be an outstanding chancellor.
'He is influential and well known as an active business leader and successful entrepreneur.'