Columbus City Attorney Zach Klein said his office had determined that Daniels committed no crime because she did not perform regularly at the club, as required under the law, and confirmed that the charges were dismissed.
According to a Columbus Police report shared by a Fox affiliate in Cleveland, Daniels went on the club's main stage at 11:30 p.m. for a performance.
The porn star is due to appear in court on Friday. Daniels, Miranda Panda of Marion, Ohio, and Brittany Walters of Pickerington, Ohio, were each charged in the undercover operation. She was released Thursday morning on a $6,000 bond. The strip club where she reportedly performed, called Sirens, also declined to comment when asked about the matter.
Avenatti slammed the arrest as "a setup & politically motivated".
The documents said that Daniels, who was semi-nude, allegedly touched some of the patrons' breasts and allowed them to touch her.
On Thursday, Avenatti tweeted that the actor would enter not guilty pleas to three misdemeanour charges.
According to an article published past year in The Columbus Dispatch, the law, which also restricts the hours of operation for strip clubs and adult book stores, is rarely, if ever, enforced.
Avenatti said Clifford was arrested in Columbus Ohio while performing an act in a strip club that she had performed across the United States.
"It reeks of desperation", Avenatti tweeted. We will fight all bogus charges. They say they've made numerous arrests under the law regarding illegal sexually oriented activity in a sexually oriented business, but did not immediately provide a number.
Daniels, whose real name is Stephanie Clifford, is suing Mr Trump and his former personal lawyer Michael Cohen to nullify a 2016 non-disclosure agreement preventing her from speaking out about the affair she says they had in 2006. Avenatti alleges the payment was a violation of campaign finance law and was created to suppress speech. In May, Trump said Daniels was paid to stop "false and extortionist accusations". Then-Governor Ted Strickland, a Democrat, allowed the law to take effect without his signature despite a Statehouse debate that included young women in pink "Dancers for Democracy" shirts opposing the effort, the Columbus Dispatch reported. If that space is violated by customers, they are generally escorted out. "And she said yes".
"This was a complete set up", Michael Avenatti, Daniels' attorney, tweeted.