According to the Sydney Morning Herald, Big Music Tour, the company behind the shows, initially hit back at Kelly's claim, suggesting the star was playing off local promoters in an attempt to secure higher fees.
But the promoter reportedly said discussions to resolve the matter dissolved after the documentary series Surviving R. Kelly aired in the US last week, which spoke to alleged victims and their families.
"Big Music Tour can confirm contracts were in place with R. Kelly and his management for the Australian tour," the promoters told Sydney Morning Herald. "We have been in discussion regarding the bizarre social media post denying the tour and had been working towards a resolution.
"However, given the current situation in R. Kelly's personal life and the controversy surrounding him, the promoters have decided not to move forward and are focusing on other events."
Big Music tour initially defended Kelly's New Zealand show after it was met with backlash, telling the New Zealand Herald they believed he was "innocent until proven guilty".
"We can confirm we are bringing R. Kelly to Australia," the company said. "Our focus remains on his incredible music and bringing the show to his Australian and New Zealand fans. Mr Kelly was cleared of all allegations and, in our view, you are innocent until proven guilty."
Lady Gaga and Celine Dion recently pulled their collaborations with R. Kelly from streaming services in light of the Surviving R. Kelly documentary.