"I am absolutely convinced that the Winter Olympics in Sweden would be extremely good and would benefit visitors, but unfortunately, we're not there politically," Stockholm’s mayor, Karin Wanngård, told Swedish Radio. "I think it's a real shame."
This is the second consecutive time that Stockholm has come close to a bid, only to later withdraw. The city's previous centre-right government pulled out of bidding for the 2022 Winter Olympics in 2014.
Today, the Social Democrats are ruling in coalition with the Green Party and Feminist Initiative, with the Green Party as the main obstacle to a bid.
"When there's a big risk that the cost for arranging the games ends up with Stockholmers, we think that a 'no' is the most responsible decision," said Daniel Helldén, Green Party leader in the city council. "We also see major risks that the event will not meet the city's environmental and climate goals."
Stockholm was vying with the Swiss city of Sion and the Turkish city of Erzerum, both of which were also considering bids.
The 2018 Winter Olympics will be hosted in the South Korean city of Pyeongchang, and the 2022 games by Beijing.