Kenya's Supreme Court invalidated the results
of the contentious August 8 vote, which showed victory for Kenyatta and ordered a new election within 60 days. It claimed the vote was fraudulent.
Odinga announced his withdrawal from the October 26 poll in Nairobi, where he told reporters that he felt the Independent Electoral and Boundaries Commission (IEBC) had refused to reform.
"We will not allow autocracy back into Kenya," Odinga said.
"The only election Jubilee is interested in is one that it must win, even unlawfully," he said, referring to Kenyatta's party.
It was not immediately clear whether the election will go ahead or whether Kenyatta will automatically be declared president.
Odinga's National Super Alliance coalition issued a statement explaining that it had issued a checklist of reforms needed before the rerun, and the while the opposition and electoral commission did not dispute the list, they argued that they would not have enough time to make the changes before October 26.
"We have come to the conclusion that there is no intention on the part of the IEBC to undertake any changes to its operations and personnel to ensure that the 'illegalities and irregularities' that led to the invalidation of the 8th August (vote) ... do not happen again. All indications are that the election scheduled for 26 October will be worse than the previous one," the statement said.
It accused Kenyatta and the Jubilee administration of trying to amend election laws to "reinstall the old order."
Kenyatta is yet to respond to Odinga's announcement.
There had been renewed fears of violence during the planned rerun.
After Kenyatta was declared the winner in the initial vote, sporadic violence erupted in some areas, claiming the lives of at least 24 people.