His decision could lead others involved in the Games to pull out or reconsider their roles.
It is claimed that more than 200,000 people have been killed and a further 2.5m forced from their homes in the five-year conflict between Sudan's Arab-dominated government and Darfur's ethnic African rebels.
Human rights campaigners have accused China of being partly responsible for Darfur's chaos because of its unstinting diplomatic backing for the Sudanese government.
The influential Oscar-winning director said his conscience would "not allow me to continue with business as usual".
Spielberg made the announcement in a statement released to Hollywood trade magazine Variety, in which he said: "At this point, my time and energy must be spent not on Olympic ceremonies but doing all I can to help bring an end to the unspeakable crimes against humanity that continue to be committed in Darfur.
"Sudan's government bears the bulk of the responsibility for these ongoing crimes, but the international community, and particularly China, should be doing more to end the continuing suffering there.
"China's economic, military and diplomatic ties to the government of Sudan continue to provide it with the opportunity and obligation to press for change."
It is not the first time China has come under pressure in the lead up to the Games over its stance on Sudan.
Earlier yesterday, nine Nobel Peace Prize laureates, including Archbishop Desmond Tutu, Elie Wiesel and Jody Williams, sent a letter to Chinese President Hu Jintao, urging the country to uphold Olympic ideals by pressing Sudan to stop atrocities in Darfur.
Prior to this, British Olympic officials insisted on Monday there is no intention to gag athletes from making political comment in China during the Games.
The statement came after reports claimed UK athletes were being asked to sign contracts which would have prohibited them from taking part in political demonstrations or propaganda.
But the British Olympic Association (BOA) has said it will now look again at the wording of the draft agreement.
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