The decision came from the "Born This Way" singer's side over security concerns especially after Islamic groups made a threat about imposing violence if the concert goes on as scheduled, reported Ace Showbiz.
"Lady Gaga's management has considered the situation minute to minute, and with threats if the concert goes ahead, Lady Gaga's side is calling off the concert. This is not only about Lady Gaga's security, but extends to those who will be watching her," said Minola Sebayang, lawyer for the concert promoters Big Daddy.
The Islamic hard-liners said that Gaga brings bad influence to the world's most populous Muslim country with her sexy clothes, provocative dance moves and music that promotes homosexuality.
The authorities have requested for Gaga to tone down the performance but her manager said that they will perform "the way it is".
As many as 50,000 tickets to the concert were sold out. Organizers could not find another venue to accommodate such large audience anywhere in Indonesia.
"This is a huge concert so it can't be moved elsewhere. Nowhere else in Indonesia can accommodate that many people," Big Daddy president director Michael Rusli said, adding it is "unfortunate" that the June 3 concert has to be cancelled in the end.
