Conor Oberst -- Drops Lawsuit Against 'Rape' Liar

Bright Eyes singer Conor Oberst is letting the chick who falsely accused him of rape walk away clean -- he's decided to drop his $1.2 million lawsuit.

According to court docs filed Friday ... Conor dismissed the suit against Joanie Faircloth 4 days after she finally admitted she made up the whole story.

Incredibly gracious move on Conor's part ... considering he said the bad publicity created by Faircloth's lie cost him $200K from his publishing company. Not to mention she probably doesn't have the million bucks.