|Raila Odinga was the presidential candidate of the National Super Alliance (NASA) coalition|
His party, the National Super Alliance (NASA), had vowed not to take part in the poll re-run unless the election commission was reformed.
The original election - won by President Uhuru Kenyatta in August - was annulled by Kenya's supreme court after a successful legal challenge by Mr Odinga.
|Opposition supporters celebrated after the original election win was declared invalid|
The court ruled the elections were flawed and said new polls must be conducted within 60 days.
Mr Odinga told a news conference: "In the interest of the people of Kenya, the region and world at large, we believe that all will be best served by (opposition grouping) NASA vacating the presidential candidature of elections slated for 26 October 2017."
NASA has repeatedly called for reforms to be made to the country's Independent Electoral and Boundaries Commission (IEBC) due to "irregularities and illegalities" in the first vote.
Violence flared during August's electionBut Mr Odinga said the electoral commission had "no intention" of making the necessary changes - primarily sacking officials guilty of electoral fraud - ahead of the second vote.
He went on to say: "All indications are that the election scheduled for 26 October will be worse than the previous one."
Violence flared across the country during the first election, with 24 people killed in political riots.
Armed police patrolled opposition protests in Nairobi during the election
Kenya's ruling Jubilee party, headed by Mr Kenyatta, has proposed election law changes which would mean that if a candidate boycotts an election, the remaining candidate automatically wins.
On Monday, the party said the proposed amendments would help avoid a constitutional crisis should Mr Odinga withdraw.
Kenya's disputed 2007 election result led to civil unrest which killed 1,200 and displaced hundreds of thousands of people.