The lawyer for a former Sydney University student who bought $4.6 million worth of designer handbags and shoes following a banking error said she was "very relieved" all criminal charges against her had been dropped.

Christine Jia Xin Lee was charged with dishonestly obtaining financial advantage by deception and knowingly dealing with the proceeds of crime in May 2016, after she spent $4.6 million from her Westpac account over an 11-month period in 2014 and 2015.

The bank had accidentally given her an unlimited overdraft, and an alert was only triggered when she transferred $1.15 million to her PayPal account over 14 transactions in one day.

The office of the Director of Public Prosecutions confirmed the charges against Ms Lee had been withdrawn on Monday.