Organiser Festival Republic said his permission to enter and perform in the UK was withdrawn on Tuesday and the three-day festival had been cancelled and refunds would be issued to all ticket holders.
The government had been under pressure to deny entry to West, now known as Ye, after he was named headline act for the Wireless Festival on April 1.
Several major companies have cancelled their sponsorship of the event.
UK Prime Minister Keir Starmer said the artist should never have been invited to headline the festival.
"We will always take the action necessary to protect the public and uphold our values," he said.
Earlier on Tuesday, Ye offered to meet members of the UK's Jewish community, saying his only goal was to come to London and present a show of change, "bringing unity, peace and love through music".
He has performed in the United States and Mexico City this year but was barred from Australia last July after releasing Heil Hitler, a song promoting Nazism.
He also advertised a swastika T-shirt for sale on his website.
He took a full-page advertisement in the Wall Street Journal in January to apologise, attributing his behaviour to an undiagnosed brain injury and an untreated bipolar disorder.
He also apologised for past expressions of admiration for Adolf Hitler and use of swastika imagery.
Ye said he had been following the conversation around Wireless.
"I would be grateful for the opportunity to meet with members of the Jewish community in the UK in person, to listen," he said.
"I know words aren't enough - I'll have to show change through my actions. If you're open, I'm here."
Health Secretary Wes Streeting said Ye's actions were not just a handful of "off-colour remarks" but "a pattern of behaviour - the releasing of a song called Heil Hitler, plastering that slogan across T-shirts, then using bipolar disorder as an excuse".
Melvin Benn, managing director at organiser Festival Republic, had earlier said Ye's comments had been "abhorrent" but that he would not be given "a platform to extol opinion," adding that his music was played on British radio stations and available on live streams.
"Forgiveness and giving people a second chance are becoming a lost virtue in this ever-increasing divisive world," Benn said.
The Board of Deputies of British Jews said the community would want to see genuine remorse and change.
"As such, we are willing to meet Kanye West as part of his journey of healing but only after he agrees not to play the Wireless Festival for this year," board president Phil Rosenberg said before Festival Republic said the event had been cancelled.
Live Nation, the other organiser of the festival, did not respond immediately to a request for comment.
Organiser Festival Republic said in statement: "The Home Office has withdrawn Ye's ETA (electronic travel authorisation), denying him entry into the United Kingdom.
"As a result, Wireless Festival is cancelled and refunds will be issued to all ticket-holders."
The Jewish Leadership Council last week condemned the booking of Ye after a rise in attacks on Jewish people and targets.
The 48-year-old has not performed in the UK since headlining Glastonbury in 2015.
Drinks companies Diageo, Pepsi and Anheuser-Busch InBev cancelled their support for the festival, and PayPal said its branding would not appear in future Wireless promotion material.
