"With the great deal of uncertainty over recent months about the arrangements that would be in place in January, it has not been possible to make the best plans to deliver the best and safest sporting (event)," he said in a statement.
Players are still awaiting clarification on whether they need to be fully vaccinated to participate at the Australian Open, also in Melbourne, and other tennis tournaments in the country.
The Premier of Victoria said he wanted all players to be fully vaccinated.
Such a requirement would cast doubt on nine-time Australian Open champion Novak Djokovic's ability to defend his title -- he is one of many players who have refused to share their vaccination status.
A leaked WTA email this week suggested unvaccinated players could take part provided they completed 14 days in hotel quarantine. Double-jabbed players would though enjoy "complete freedom of movement".
However, the Premier of Victoria — the state where the Grand Slam is held — said he wanted all players to be fully vaccinated.
"All the people who are watching the tennis at the Australian Open, they're going to be double-vaxxed, all the people that work there are going to be double-vaxxed," Dan Andrews told public radio.
"It stands to reason that if you want to get into the country to be part of that tournament, then you should be double-vaxxed as well."