The Iranian Hajj Organisation said: "Saudi Arabia is opposing the absolute right of Iranians to go on the hajj and is blocking the path leading to Allah."
The Saudi side had failed to respond to Iranian demands over "the security and respect" of its pilgrims to Mecca, of whom 60,000 took part in last year's hajj, the organisation said.
In the latest dispute between regional rivals Tehran and Riyadh, "after two series of negotiations without any results because of obstacles raised by the Saudis, Iranian pilgrims will unfortunately not be able to take part in the hajj" in September, Iran's Culture Minister Ali Jannati said.
The Saudi hajj ministry said it had offered "many solutions" to meet a string of demands made by the Iranians in two days of talks.
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Agreement had been reached in some areas, including to use electronic visas which could be printed out by Iranian pilgrims, as Saudi diplomatic missions remain shut in Iran, it said.
It would be the first hajj in almost 30 years to take place without the participation of pilgrims from Iran.
In January, relations were severed again after Iranian demonstrators torched Saudi Arabia's embassy and a consulate following the kingdom's execution of a prominent Shiite cleric.
Shiite Iran and predominantly Sunni Saudi Arabia are at odds over a raft of regional issues, notably the conflicts in Syria and Yemen in which they support opposing sides.
Earlier this month, Iran had accused its regional rival of seeking to "sabotage" the hajj, a pillar of Islam that devout Muslims must perform at least once during their lifetime if they are able.
But the Saudi hajj ministry said on Friday that Riyadh had agreed to allow Iranians to obtain visas through the Swiss embassy in Tehran, which has looked after Saudi interests since ties were severed in January.