The decision was made yesterday following 13 days of searching in Natewa Bay in Vanua Levu.
The investigator in charge of the search Andrew McGregor said his team has done everything they can to find the pair and the wreckage of the helicopter, but conditions in Natewa Bay have proved too difficult.
Australian pilot Gilbert Parker was transporting the sick toddler and his mother to a hospital when the incident happened on 2 August.
The mother's body was recovered by villagers from the Natewa Bay shoreline the next day.
McGregor said it was likely the helicopter broke up into smaller pieces and with the strong current, would have been carried several miles out of the search area, making the discovery of significant wreckage even with greater search resources, unlikely.
McGregor said a large part of the search area is over sunken reef which is hazardous to sea crafts and the specialist sonar equipment used by the Navy.
Despite the fact that significant wreckage has not been found, many pieces of the helicopter such as sections of aluminium skin, seat squabs, personal effects and the body of one of the passengers was found along several miles of the western coast of Natewa bay, McGregor said.
He said the crash will continue to be investigated and the findings will be included in the final air crash investigation.