Mr Cannon-Brookes used Twitter on Sunday night to announce it would not proceed, ahead of the power company's confirmation to the Australian Securities Exchange on Monday.
"The Brookfield-Grok consortium looking to take private & transform AGL is putting out pens down - with great sadness," he tweeted.
The consortium had lifted its offer to $8.25 per share, worth about $9 billion plus debt, from an initial unsolicited bid of $7.50 in late February.
The target's board said the revised offer was still well below both the fair value of the company on a change of control basis, given the expected value to be generated by its proposed demerger.
"The proposed demerger will be a catalyst for the potential realisation of shareholder value," Chair Peter Botten said on Monday.
"It will create two industry leading companies with distinct value propositions.
"It will allow each business to be valued separately and more positively by the market on the basis of their own specific fundamentals."
AGL plans to split the company into two listed entities - green energy retailer AGL Australia and coal-fired electricity generator Accel Energy - by June 30.
The proposed entities have been assigned emissions reductions targets, putting them on course to reach net-zero in 2040 and 2047 respectively.
The Brookfield and Grok Venture consortium had planned to accelerate those timetables by 10 years or more.
Mr Cannon-Brookes said the demerger plan was "a terrible outcome for shareholders, taxpayers, customers, Australia and the planet we all share".
AGL shares last traded at $7.43, valuing the group at $4.8 billion.
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