New Zealand Football said in a statement Thursday the decision to withdraw was taken after a lengthy consultation process with government agencies, the Professional Footballers Association, team management and staff.
The Japan Football Association had proposed moving the 29 March match from Tokyo to Osaka, which it had assured NZF was free from any risk arising from last week's earthquake, resulting tsunami and ongoing nuclear crisis.
The New Zealand under-17 team has also been withdrawn from the Sanix Cup in Fukuoka and redirected to Doha, Qatar, to continue its preparations for the under-17 World Cup.
"This has been a tough decision to make, but with the match just two weeks away and media reports reflecting such great uncertainty surrounding the nuclear situation in Japan, we believe it is prudent to err on the side of caution and withdraw our teams," NZF chairman Frank van Hattum said.
Last week's 9.0-magnitude earthquake and tsunami knocked out power and destroyed backup generators needed for reactors' cooling systems at the Fukushima Dai-ichi nuclear plant on the country's northeast coast. That added a nuclear crisis on top of twin natural disasters that likely killed well over 10,000 people and left hundreds of thousands homeless.
"Our hearts continue to be with the people of Japan and everybody affected by the earthquake as they focus on this period of recovery," van Hattum said.
"New Zealand Football will work as hard as possible with the Japan Football Association to examine the possibility of rescheduling the fixture for a future date." A 25 March friendly in China is confirmed, with the New Zealand team due to leave for Wuhan on 22 March.