New Zealand won the opening leg 7-1 in Lae on Saturday and will represent Oceania at the Olympic Tournament in Rio after PNG pulled out.
FIFA were notified of PNG's withdrawal when the squad did not receive the required visas to enter New Zealand for the return match.
The withdrawal is being analysed by the chairman of the FIFA Disciplinary Committee, which will decide on whether further steps or investigation is required.
The Post Courier reports that the PNG players were left in tears at Port Moresby's Jackson's International Airport on Sunday.
The New Zealand team will now play an exhibition game against an Invitational XI this evening.