At a cabinet meeting on Friday the decision was made to withdraw from hosting because of a World Bank report looking at its economic impact.
'Akilisi Pohiva said cabinet decided to withdraw because of the financial implications of hosting the event.
RNZI repots preparations for the games have been beset with controversy, delays, and legal action.
Mr Pohiva said the decision to withdraw is another blow for Tonga but it could not be avoided.
