Bass-baritone Yevgeny Nikitin, 38, from St. Petersburg's prestigious Mariinsky Theatre, had been scheduled to make his debut on Wednesday in the title role of a new production of "The Flying Dutchman".
But Nikitin informed organisers of the festival, dedicated exclusively to Richard Wagner (1813-1883) works, he was pulling out after a German television programme drew attention to his controversial tattoos.
"I have been confronted with questions about the tattoos, their background and their meaning," the Murmansk-born singer said in a statement posted on the festival's website.
"I had them done in my youth. It was a big mistake and I wish I'd never done it," Nikitin said.
"I was not aware of the extent of the irritation and offence these signs and symbols would cause, particularly in Bayreuth given the context of the festival's history.
"As a result, I have decided not to appear at the Bayreuth Festival."
On Friday, German public television ZDF's culture magazine "Aspekte" had aired a feature about a Nazi symbol tattooed on Nikitin's chest.
The Sunday newspaper Bild am Sonntag was due to run a similar article.
On Friday, the Bild daily ran an interview with the heavily-tattooed Nikitin, who was once a drummer in a Russian heavy metal band, headlined "Would You Go To The Opera With This Man?"
But that article did not pick up on the Nazi associations of his tattoos.
The festival organisers said in their own statement that they heard about the reports, they immediately sought a meeting with Nikitin.
Nikitin's "decision to pull out of the role is fully in line with our policy of completely rejecting Nazi ideology in any shape or form," the statement said, adding that the festival organisers "accepted the full consequences" of the last-minute move.
Nevertheless, the production's director, Jan Philipp Gloger, said the artistic damage would be "immense, even when a replacement has been found and familiarised himself with the production."
With the curtain due to go up on the festival and the new production of "The Flying Dutchman" on Wednesday, the organisers effectively have just four days to find a new singer for the title role.
The Bayreuth Festival, the world's oldest summer music festival, was founded by Wagner, a notorious anti-Semite, as a showcase for his operas and he had the famous Festspielhaus theatre built to his own designs.
Wagner was Adolf Hitler's favourite composer and after the Nazis seized power in Germany in 1933, Hitler became a regular guest at the Festspielhaus built on Bayreuth's fabled "Green Hill".
The Nazi dictator also became a close friend of Winifred Wagner, the widow of the composer's son Siegfried.
And Hitler was affectionately called "Uncle Wolf" by her sons, Wolfgang and Wieland, who went on to reinvent and relaunch the festival after the end of World War II.
While Bayreuth's heads Katharina Wagner, 34, and Eva Wagner-Pasquier, 67, have pledged to open up festival archives to independent historians to fully explore its Nazi past, the topic remains extremely sensitive.
The glitzy opening night is also traditionally attended by Germany's political and social elite, so the appearance of a singer brandishing Nazi tattoos would be a huge embarrassment.
"The Flying Dutchman", Wagner's first mature opera, is the only new production at this year's festival, which runs from July 25 to August 28.
It tells the story of the captain of a ship doomed to sail the seas for ever until he finds love.
In the pit for the new production will be German star conductor Christian Thielemann, widely seen as Bayreuth's unspoken general music director.