The video, shared as a Facebook clip, shows the 11-month-old baby from Kepsey in New South Wales being forced, allegedly by another person, to inhale the smoke as his mother watches on.
The baby was seen coughing and sputtering out smoke as laughter was heard in the background.
Those who saw the video said they were alarmed.
“It’s terrible, everyone can’t believe it. Why would you give a young baby a vape?” a local was quoted as saying to 7NEWS.
Another said: “Disgusting… I can’t believe this.”
After receiving complaints an investigation was started by the New South Wales police.
“Police have now spoken with the child’s family and – following advice provided by medical professionals and other governmental agencies – no further police action will be taken,” a police statement said on Wednesday.
No arrests have been made in the case.
The baby’s family members said they found the video “putrid”, but condemned violent reactions received by the child’s mother.
A family member who spoke anonymously to 7NEWS condemned the actions of her relative.
“It’s honestly putrid, like I will not say that it’s not because it is,” a family member told 7NEWS anonymously.
“I removed my nephew from that situation,” she said.
Another family member said the video was a mistake.
“It was just a stupid mistake that she made with a bunch of friends,” she said, referring to the child’s mother.
She said the family had received several death threats.
“There’s no need for the violence,” she was quoted as saying.
Experts said the video normalises vaping that could lead to lung damage.
“It is incredibly alarming to see that video of that poor child,” Paige Preston from the Lung Foundation said to 7NEWS.
“This is a massive concern because it does normalise vaping, it makes light of something that is incredibly dangerous to children and to adults.”