On Friday, there was to be a draw for the upcoming Under-20 World Cup, but the draw was cancelled after Bali's governor's statement not to accept Israel's team.
Now it is clear that Indonesia will get rid of the championship. The announcement comes after a meeting between Fifa chairman Gianni Infantino and Indonesia football federation president Erick Thohir.
"Due to the prevailing circumstances, Fifa has decided to deprive Indoniesia of hosting the U20 World Cup," Fifa said in a statement.
Earlier in March, there were large demonstrations in the capital, Jakarta, where people waved the flags of Indonesia and Palestine, demanding that Israel not be allowed to participate in the championship.
Fifa announces that it will continue to support Indonesia's football federation after the tragic accident last autumn in which 135 people died in violence after a football match.
Work on finding a new host country is ongoing.
The championship will be played May 20-June 11.