Just two days before the Pakistan team was due to depart for India in preparation for the biennial one-day tournament, a Pakistan Cricket Board (PCB) official said that Younis had announced his decision at a press conference in Lahore.
The in-form batsman was scheduled to hold a full press conference on Saturday but instead he turned up, uttered one sentence and left.
"I will not lead the team," Younis told reporters.
"I don't want to be a dummy captain and the reason why I have refused the captaincy will be revealed afterward."
28-year-old Younis was named as captain after regular skipper Inzamam was suspended by the ICC for four one-day matches for bringing the game into disrepute in the fourth Test debacle at the Oval against England in August.
"We have learnt today that Younis Khan does not want to be captain the national side," PCB director of cricket operations Saleem Altaf told Reuters.
"The likely replacement would be Mohammad Yousuf, who was named vice captain for the tournament.
"We don't think this is the way to do things. If he had any problems he should have discussed it with us first," Altaf added.
Unnamed sources within the team revealed to Reuters that Younis had decided to turn down the captaincy because several senior players were not happy with his appointment as skipper.
"Younis felt that under these circumstances it would be better for him to play as a ordinary member of the team and do his best for the side," one source said.
Younis has previously captained Pakistan in two Test matches and two one-day internationals, with a 1-1 win/loss record in both forms of the game.