The singer was due to perform on July 24 at the Cratos Premium hotel and casino complex - but the booking outraged Greek Cypriots in the south of the island nation.
They claimed that performing in the disputed north would be equivalent to making a political statement and the singer was flooded with thousands of letters of protest.
"Jennifer Lopez would never knowingly support any state, country, institution or regime that was associated with any form of human rights abuse," the Sky News quoted spokesperson for JLo as telling TMZ.com.
"After a full review of the relevant circumstances in Cyprus, it was the decision of management to withdraw from the appearance. This was a team decision that reflects our sensitivity to the political realities of the region."
However Feza Firat, whose agency represents the Cratos hotel, claimed that Lopez had been "led to believe there was a war going on".
He added that the singer's fee had already been paid.
The US-based American Hellenic Educational Progressive Association claimed the concert would "lend credence to an illegal entity recognised only by Turkey". (ANI)