The Commission is expected to "formally terminate actions against the UK" within the next couple of months, industry association Dairy UK told this website.
A spokesperson for the UK Food Standards Agency also said the Commission had indicated it may drop its complaint.
The move would represent an EU climb-down after Commission officials filed court action against the UK last autumn, alleging it had not sufficiently tackled safety and hygiene lapses found at Bowland Dairies in northern England.
Commission inspectors descended on British dairy firms in November to assess the extent of the problem.
But their report, due in the next few days, is thought to contain "nothing major or significant that the UK has to look at," said Jim Begg, Dairy UK director general.
He defended industry practices: "We have responded positively to the Commission. All practices recommended have been put in place."
Dairy UK recently applied for government funding to help research cheese cleaning practices, and hopes to begin work on this in the near future.
Recovery of mouldy cheese was one of the problems Commission inspectors found at Bowland in the early summer last year. The firm was eventually barred from trading in the EU after a follow-up inspection found concerns over its testing for antibiotics residues in milk - a decision the group has vehemently disputed.
In the subsequent row, Commission officials accused the UK Food Standards Agency (FSA) of failing to act to protect the public.
But it is understood that internal discussions at the Commission are now likely to result in the case against the UK being dropped.
"The Commission has indicated that it has initiated procedures that would terminate the action," said a spokesperson for the FSA, which has repeatedly rejected Commission accuations against it.
A final decision is not expected before a Commission committee meeting on 23 March, the spokesperson said.
Begg urged the Commission to ensure dairy hygiene practices were enforced equally across all EU member states.
"We have to be satisfied that measures being applied in the UK are also being applied across the EU. We look to the Commission to ensure that those common rules are applying."
The FSA attempted to deflate the dispute in late October by revising its guidance on dairy hygiene, and telling all local authorities to act immediately to ensure EU rules on contaminated milk and cheese recovery were applied correctly.