Police in Indonesia had refused to issue a permit for the US pop star after Islamic groups objected to her show, claiming it was too vulgar.
The hardline Islamic Defenders Front (FPI) had threatened to try to stop Lady Gaga getting off the plane.
Indonesia is officially secular but has more Muslims than any other country.
More than 50,000 tickets had been sold for the 3 June event. Promoters said they would offer refunds.
Police had said they would only issue permits for the concert – part of Gaga’s Born This Way Ball concept tour – if the flamboyant singer agreed to tone things down. Instead, her management pulled the plug on the show.
The singer said she was “devastated” at the decision.
Just hours before the announcement, Lady Gaga wrote on her Twitter account: “There is nothing holy about hatred.”
Poor Lady Gag!