In a statement on Sunday, Tedros Adhanom, WHO director, said: "Over the last few days, I have reflected on my appointment ... As a result I have decided to rescind the appointment.
"I have listened carefully to all who have expressed their concerns, and heard the different issues that they have raised."
Mugabe, who is 93 years old, had been asked to serve in the role to help tackle non-communicable diseases (NCDs) such as heart attacks, strokes and asthma across Africa.
The decision led to confusion and anger among key WHO member states and opposition figures in Zimbabwe, who noted that the country's healthcare system has suffered from challenges under Mugabe's decades-long leadership.
Canadian Prime Minister Justin Trudeau was among those who had criticised the appointment, saying it was "absolutely unacceptable and inconceivable".
Social media users celebrated the WHO's decision on Sunday.
"Good news: Sanity restored," tweeted Andrew Stroehlein of Human Rights Watch.
"I'm relieved," said columnist Nicholas Kristof, writing on Twitter.
"Mugabe's appointment as a goodwill ambassador of WHO has been rescinded. Twitter again doing the Lord's work," said Twitter user J Papiki.
Source: Al Jazeera News