Prizes will instead be given out individually throughout May and June, with sport stars including Lewis Hamilton, Usain Bolt and Michael Phelps shortlisted for this year's awards.
Its understood that no venue had been chosen for this year's awards with venues changing every year. The 2008 event was held with lavish proceedings at the Mariinsky Concert Hall, St Petersburg, Russia.
Edwin Moses, chairman of the Laureus World Sports Academy, said: "This has been a very difficult decision, but we are painfully aware of the global problems caused by the current economic difficulties.
"It seemed to us, with so many people suffering, that this was the wrong time to be staging this event. This is the responsible thing to do and we are sure everyone will understand why we are doing this.
"We will monitor the economic situation over the next few months and announce in due course the arrangements for the next Laureus World Sports Awards."
Advertising remains unaffected, with luxury goods group Richemont, and sports car manufacturer Daimler, joint founders of Laureus, confirming their long term commitment.
Vodafone also expressed its loyalty. David Wheldon, global brand director of Vodafone, said: "We fully understand this decision in these difficult times.
"Vodafone is a significant and long-standing supporter of sport sponsorship both at a grass roots and elite level and we look forward to continuing our association with Laureus which does so much good work around the world."
The organisation will now focus on growing its charity, the Laureus Sport for Good Foundation.
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