MLS, Barcelona and Miami-based Bolivian businessman Marcelo Claure made a joint announcement that cited "adverse market conditions" as the reason behind the decision.
Barcelona said in a statement they would continue with marketing and promotional activities in the States.
But league commissioner Don Garber told the Miami Herald that despite huge interest in soccer in Miami, he was not sure it was the right place for a new MLS team.
"We are convinced Miami is a soccer market but we are not convinced it is an MLS market at this point and for the stability of the league we had to make sure we made a smart decision that didn't come back to haunt us later," he said.
"I think someday, when our league is established as the league of all soccer fans in America, Miami will be in our family. But for now we are seeing more support and promise from the other (bidding) cities -- Portland, Vancouver, Ottawa and St. Louis.
"We didn't sense that same local buzz from the soccer community in Miami," he said.
Two teams are due to be added to the league in 2011 -- Seattle is the newest team in the league this season.
Miami currently has a team in the second-tier United Soccer Leagues but that club could also vanish because the team's owners have said they want to see an improvement in season ticket sales or they may end their support.
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