Last month Reuters exclusively reported that Malaysian billionaire owner Vincent Tan was exploring an IPO of the team after they sealed promotion to the lucrative English Premier League.
Tan, who owns 36.1 percent of the club and is the former chairman of conglomerate Berjaya Group, said the cancellation of the tour was a missed opportunity.
"A schedule of events had been put in place ahead of the opening Premier League fixtures, further raising awareness of Cardiff City Football Club in Malaysia," Tan said in a statement on the Welsh club's website on Tuesday.
"However due to the current poor air quality in Kuala Lumpur, it has been decided for the welfare of all concerned to delay the trip, re-establishing plans in the future when the manager and players can better interact with Malaysian based supporters in a suitable environment."
Kuala Lumpur remained shrouded in haze on Wednesday as the environmental crisis continued after a week of thick 'hazardous' smog covered Malaysia and neighbours Singapore.
Air quality in Singapore has improved significantly in recent days but the crisis - caused mostly from fires set on palm oil plantations on Indonesia's Sumatra island - could cost the two countries an estimated $9 billion (£5.83bn).
While Cardiff opted against breathing in the poor air, local matches have continued to be played in Malaysia despite hazardous pollution readings and warnings.
"It is unhealthy, especially, for athletes, who train intensively. Prolonged exposure could cause cell mutations leading to cancer," National Sports Institute chief executive officer Dr Ramlan Abdul Aziz told Malaysia's New Straits Times daily on Wednesday.
Dr Ramlan said it was unhealthy to play matches if the Air Pollution Index was over 100 and the paper said Tuesday's Super League match between PKNS and Selangor went ahead on the outskirts of Kuala Lumpur despite a reading of 252.
Premier League side Chelsea are due to play an exhibition match in Malaysia next month with Spanish champions Barcelona will also play a friendly in Kuala Lumpur in August.
Indonesia president Susilo Bambang Yudhoyono said they were doing everything they could to contain the fires on the island of Sumatra, including the deployment of military aircraft to water bomb the blazes.