Sapporo's mayor Fumio Ueda said the withdrawal was mainly due to the financial reasons, leaving Tokyo and Fukuoka as Japan's two candidate venues.
Ueda said Sapporo would have to bear around $2.1billion of the estimated total $15.2billion cost of hosting the Games.
Sapporo's city assembly voted in March 2005 to bid for the Games but a city poll conducted last December showed just over 33 per cent in favour.
