Anne Sacoolas, the wife of a US intelligence officer, returned to her home country after the car she was driving allegedly collided with the 19-year-old's motorbike outside RAF Croughton in Northamptonshire on August 27.
The 42-year-old suspect sparked an international controversy after claiming diplomatic immunity - despite the Foreign Office later saying Sacoolas's husband was not a registered diplomat in a recognised role.
Under the Vienna Convention on Diplomatic Relations, families of diplomats are granted immunity from arrest or detention, with the sending state able to issue a waiver of that immunity.
According to the CPS, the immunity does not apply to dependants of consular officials based outside of London.
The force eventually passed the completed file of evidence to the prosecution service on November 1 - with Friday's charging decision coming just under seven weeks later.
Sacoolas was twice interviewed by Northamptonshire Police - once on the day after the crash, and on another occasion by officers who travelled to the US.
Chief Crown Prosecutor Janine Smith, said: "Following the death of Harry Dunn in Northamptonshire, the Crown Prosecution Service has today authorised Northamptonshire Police to charge Anne Sacoolas with causing death by dangerous driving.
"The Director of Public Prosecutions has met with Harry Dunn's family to explain the basis of the decision we have made following a thorough review of the evidence available.
"May I remind all concerned that criminal proceedings against Anne Sacoolas are now active and that she has a right to a fair trial.
"It is extremely important that there should be no reporting, commentary or sharing of information online which could in any way prejudice these proceedings."
A Northamptonshire Police spokeswoman added: "We welcome the charging decision announced today by the Crown Prosecution Service in relation to Anne Sacoolas.
"However, because criminal proceedings are now active, it would be inappropriate for us to comment further at this time."
Extradition between the US and the UK is governed by a treaty signed by both countries in 2003, and requests prepared by the CPS are sent by the Home Office to the requested state - in this case the US - through the diplomatic route.
Meanwhile Foreign Secretary Dominic Raab said on Friday a review into the immunity arrangements at Croughton for US personnel and their families had concluded.
It found that it was an "anomaly" that family members had "greater protection from UK criminal jurisdiction than the officers themselves".
Mr Raab added: "On the basis of the Review, I have instructed my officials to begin discussions with the US on the most effective way to address this anomaly."
Harry's death was the start of three months' worth of separate legal battles for the teenager's family - a judicial review against the Foreign Office, a referral of Northamptonshire Police to the Independent Office for Police Conduct (IOPC), an investigation into the US administration's handling of the case and a civil claim against Sacoolas herself.
Since the investigation into the teenager's death was launched, the family have taken their fight to the US and even met President Donald Trump at the White House.
The meeting with Mr Trump also sparked controversy after it later emerged that Sacoolas was sat in the room next door ready to meet with Harry's parents - an offer the teenager's family refused.
The decision to charge the suspect came just days after Mrs Charles was left "utterly devastated" by footage which showed Sacoolas reversing out of her driveway at her home in the state of Virginia.