The communist state was due to field a team in the 2006 Peace Queen Cup Korea to be held in six South Korean cities from October 28 to November 4.
But the regime informed officials after the country's nuclear test on Monday that it could not send its team to the $200,000 competition.
"We decided to find a substitute team. The decision reflects our concerns that the safety of North Korean players will not be guaranteed under these circumstances," an organising official said.
The committee originally invited eight teams from the United States, Brazil, Australia, Canada, Denmark, Italy and the two Koreas.