"Racing in city centres always poses challenges and as this process is taking longer than expected, in agreement with the city of Sao Paulo, we’ve decided to place negotiations on stand-by until the privatisation process is complete."
Formula E's fourth season starts in Hong Kong on Saturday, with Sao Paulo originally scheduled for March 17 next year as the fifth round of the 14 race season.
Brazil currently has two Formula E drivers with the inaugural champion Nelson Piquet Junior and title holder Lucas di Grassi.
The Sao Paulo race was one of four new venues on the calendar along with Rome, Zurich and the Chilean capital of Santiago.
Formula E said a replacement for the Brazilian round would be presented to the governing International Automobile Federation (FIA) in Paris next week.
Sao Paulo city authorities are also in the process of privatising the Interlagos circuit that hosts the Brazilian Formula One Grand Prix.
(Reporting by Alan Baldwin, editing by Toby Davis)
