"We are out, it's over from our side," Samir Zaher, head of the Egyptian Soccer Federation.
He said the federation wanted to go ahead but had failed to win government support.
"We cannot afford to say yes unless the government says yes," he added. "It was a matter of finance. They were not interested in giving a guarantee."
Egypt's bid effectively lapsed when it failed to confirm its bid to soccer's world governing body FIFA by April 30.
"Brazil, England, Germany, Nigeria, South Africa and Morocco all confirmed their definitive bid to host the 2006 World Cup before the deadline expired," FIFA said in a statement.
"As no confirmation was received from Ghana and Egypt, it is assumed that they have tacitly discontinued their bids."
Reuters
