The actor has been told he must reimburse the police for the overtime that dozens of detectives spent looking into the claim.
Empire star Jussie Smollett has been ordered to pay $130,000 (£100,000) to police – even though charges alleging he staged a hate crime to boost his career have been dropped
The actor was accused of filing a false police report stating that he was the target of a racist, homophobic attack in Chicago in January.
Prosecutors attracted controversy earlier this week when they suddenly dropped all of the charges against him.
Now, city officials have told Smollett that he must reimburse the police for the overtime that dozens of detectives spent looking into the claim.
The letter to the 36-year-old and his lawyers said the cash “could have been used for other investigations” – and warned he could be fined and taken to court if he refuses to pay.
It comes after Donald Trump expressed outrage over the decision to drop the charges.
The president tweeted: “FBI & DOJ to review the outrageous Jussie Smollett case in Chicago. It is an embarrassment to our Nation!”
Chicago mayor Rahm Emanuel said Smollett had “abused” the city – adding that he wants to “get to the bottom” of what happened.
Smollett, who is black and gay, had claimed that two men attacked him on a street, putting a noose around his neck while shouting slurs and pouring bleach over him.
However, prosecutors had accused him of paying two brothers, Abimbola and Olabinjo Osundairo, $3,500 (£2,658) to carry out the attack.
The actor has maintained his innocence and insists the attack happened.
Police have also alleged that Smollett sent a threatening letter to himself to the television studio where Empire is filmed.
He initially earned widespread sympathy from celebrities and some Democratic presidential candidates over his account of the alleged assault.
Smollett’s lawyers say he is hoping to move on to his career, but it remains unclear whether he will return to Empire.
The star was written out of the last two episodes of the programme’s most recent season.