American Airlines executives had balked at Qatar's proposed investment amid an ongoing dispute between the two entities.
State-owned Qatar Airways CEO Akbar Al-Baker last month had reiterated plans to invest in American as the company filed for US regulatory backing to buy shares.
On July 12, American filed a Securities and Exchange Commission document saying that Qatar's plan to invest in American Airlines was unsolicited, and that it would continue to lobby for a USA government crackdown on Gulf carriers Qatar, Emirates and Etihad.
Qatar Airways has confirmed it would not be going ahead with its controversial plan to a buy a stake in American Airlines.
American did not immediately return a request for comment Wednesday.
The Middle Eastern carrier had proposed to take a ten per cent stake in the oneworld airline.
"Previously, Parker had described Qatar's bid for a 10% stake in his company as "puzzling" in a letter to shareholders, adding that he wasn't "particularly excited" about the Qatari airline's outreach".
Additionally, Qatar Airways Cargo has also expanded its footprint in South America, with commencement of freighter services to São Paulo, Brazil; Buenos Aires, Argentina; and Quito, Ecuador.
"Qatar Airways will continue to investigate alternative investment opportunities in the United States of America and elsewhere that do meet our objectives".
On Wednesday, American spokesman Matt Miller said Qatar's decision not to invest "in no way changes the course for American".