Global Live Events announced Tuesday the band would no longer perform after fans, media and the singer's estate noted bassist Gene Simmons has said in recent years that he was convinced Jackson molested children.
Jackson was acquitted of molestation charges after a 2005 trial in California.
It is the latest stumble for a show that is endorsed by Jackson's mother and several siblings but is opposed by brothers Jermaine and Randy. Fans have protested ticket prices, the lineup and the show's location since the show was announced last month.
KISS' departure leaves Smokey Robinson, Christina Aguilera and Cee Lo Green as the show's superstars.