City authorities said the decision was prompted by concerns over the expected costs and a lack of public support, reports NZZ Online.
It follows the announcement last week that Zurich would not be able to host any 2008 European championship games owing to a legal wrangle over plans for a new stadium.
“The current public finance position does not permit this sort of commitment in terms of infrastructure, security, general organisation or deficit guarantees,” said the Zurich city authorities in a statement.
Furthermore, officials said public support for the project would have to be “convincingly secured” by 2007 – the date when the International Olympic Committee is due to decide on a host venue.
“From today’s perspective, the risk of rejection is judged as too high,” added the statement.
Under the Swiss direct democracy system, major projects of this kind can be halted by a negative popular vote, even if they enjoy full political support.
