Khan, who owns the NFL franchise Jacksonville Jaguars and English Premier League club Fulham, made the decision after his bid received criticism from some figures within English soccer.
"The intent of my efforts was, and is, to do right by everyone in a manner that strengthens the English game and brings people together, not divides them," Khan said in a statement on Wednesday. He had made his offer to England's Football Association (FA) governing body public in April.
"I cannot rule out revisiting the opportunity at another time when perhaps the Football Association family is unified in its views on the opportunity," Khan added.
The FA had pledged to invest proceeds from the sale into the grassroots of English soccer, and Khan's bid had received support from FA Chief Executive Martin Glenn.
But former England defender Gary Neville had led criticisms of the proposal, telling a British parliamentary hearing in July that the plans were "a short-term plan we'll regret forever."
Glenn said in a statement on Wednesday: "Mr. Khan believed that his offer to buy Wembley Stadium would release funds to help improve community football facilities in England and that it would be well received by all football stakeholders.
"At a recent meeting with Mr. Khan he expressed to us that, without stronger support from within the game, his offer is being seen as more divisive than it was anticipated to be and has decided to withdraw his proposal," Glenn added.
The stadium, in the north-west of the British capital, was reopened in 2007 after a multi-million dollar rebuild. The previous site had opened in 1923 and quickly became known as the home of English football.
As well as hosting home national soccer team games and other major matches, Wembley stages multiple NFL games each season -- including one each year by Khan's Jacksonville Jaguars.
Wembley's proposed purchase had been seen by many as a key move in the potential future relocation of an NFL team to London, though Khan repeatedly denied that he was intending to move the Jaguars abroad.
Pakistani-born Khan is the 217th richest person in the world, according to Forbes, having made his money by developing auto parts.
In 2013 he bought Fulham, a London-based soccer club that was promoted back into the Premier League in May by winning a play-off final at Wembley.
Khan will be expected to watch the Jaguars when they face the Philadelphia Eagles at the stadium on October 28.
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