He announced the decision in a midnight tweet amid reports in Britain that a Trump visit would be met with protests.
The president wrote that he was nixing the trip - initially scheduled for next month - because he is displeased with the location of the new embassy and its price tag.
"Reason I canceled my trip to London is that I am not a big fan of the Obama Administration having sold perhaps the best located and finest embassy in London for "peanuts," only to build a new one in an off location for 1.2 billion dollars," Trump wrote.
"Bad deal. Wanted me to cut ribbon-NO!"
Trump has also been offered a full-blown state visit to Britain but no date has been set, amid jitters over protests.
As recently as January 7, Prime Minister Theresa May reiterated that a state visit is still planned, saying "Trump is coming to the U.K."