The decision follows pressure from the Progressive Democrats, the government's center-right coalition partner, although Ahern is still hoping investors will build the stadium.
A decision not to build the arena, dubbed the Bertie Bowl because of the Prime Minister's interest in soccer, may harm a joint bid by Ireland and Scotland to host the 2008 European Championship soccer tournament.
Opposition leaders have disputed Ahern's estimate that the stadium will cost EUR400m ($390m), saying the real figure will be closer to EUR1billion ($1.2bn).
Prime Minister Bertie Ahern has stated that Ireland won't use government funds to build a EUR400 million ($390m) soccer stadium in Dublin because it needs the money for roads.
