Utah football coach Kyle Whittingham said in a statement early Friday that there were further concerns about Hatfield's off-field behavior after he was suspended from the program Monday.
Authorities have accused Hatfield of robbing a man at knifepoint who planned to buy an Xbox game console from him. He also is accused of stealing and trying to sell cellphones.
Hatfield's attorney, Greg Skordas, said the criminal case was headed in a positive direction and he was surprised by the dismissal.
The 20-year-old Hatfield is a junior from Los Angeles who started 10 games in 2014.