"A 45-year-old man was arrested on 19 September on suspicion of possession of drugs in the Hampstead Heath area," a Metropolitan Police spokesman said.
The singer was taken to a police station and given the caution for possessing class A and class C drugs, police said.
Under British law, class A drugs can include crack cocaine.
Michael, 45, has admitted using drugs in the past.
In 2006, he was found slumped over the wheel of his car and last year he was given a two-year driving ban after pleading guilty to driving while unfit through drugs.
Michael has sold more than 100 million records worldwide, with seven US number one singles, 11 number one singles in Britain and six number one albums.
Last month he wrapped up his first tour for 15 years with concerts in London and Copenhagen and said they were his last ever arena and stadium shows.
On the tour, he wore a police uniform to perform his number one hit "Outside" which refers to his arrest in 1998 when he made lewd advances to an undercover male police officer in a public toilet in Beverly Hills, California.