The two leaders will, however, still meet for formal discussions on Saturday.
Berlusconi said in a statement on Friday that he would not attend an opera performance because it was likely a group of "provocateurs" would try to sow trouble.
Berlusconi said earlier this week that he expected left-wingers to demonstrate outside the amphitheatre and even boo him inside the arena during the performance.
Friday night's informal encounter would have been the first time Berlusconi and Schroeder came face-to-face since the Italian leader caused an uproar when he compared a German politician to a Nazi concentration camp official.
"A head of state can't be afraid of every little boo"
Vannino Chiti, national coordinator for the Democrats of the Left
The row continued when Schroeder cancelled a planned Italian holiday in July after a junior tourism minister in Berlusconi's government made highly unflattering comments about German tourists.
The two leaders had been invited to the opera by European Commission President Romano Prodi, a former centre-left prime minister of Italy and political foe of Berlusconi.
Prodi and Schroeder attended the
opera after meeting at a café
Although disappointed, Prodi said the goal of “strengthening friendly relations and collaboration between the two countries would be achieved through bilateral talks.”
But Italy's opposition parties were less forgiving.
"A head of state can't be afraid of every little boo," Vannino Chiti, national coordinator for the Democrats of the Left, told AGI news agency.
"Berlusconi has not got the courage to face up to a city like Verona where his party got 40 percent of the vote in the last election," said Renato Peretti, a regional leader of one of Italy's communist parties.