At least two people have died due to the weather conditions that have hit the area throughout May.
Heavy rain caused more than a dozen rivers to burst their banks during a 24-hour period, while red weather warnings for flooding and landslides remain in place for this weekend.
This has led many locals to be displaced, while emergency flood relief fundraisers have been created.
F1 instructed paddock personnel setting up garages and hospitality units to leave the circuit on Tuesday afternoon as a precaution amid a threat of flooding from the adjacent Santerno river.
They were also instructed not to return to the venue at all on Wednesday. Meanwhile, some teams opted to relocate staff members to different hotels.
Images and videos also emerged on social media showing that the support paddock and TV had been breached by water.
Now, following Wednesday morning discussions with the authorities and race promoter, championship chiefs have ruled that the race cannot proceed safely.
Nor would it be compatible with the risk faced by the community and the enhanced strain on emergency services in the region.
F1 CEO Stefano Domenicali said: "It is such a tragedy to see what has happened to Imola and Emilia Romagna, the town and region that I grew up in and my thoughts and prayers are with the victims of the flooding and the families and communities affected.
"I want to express my gratitude and admiration for the incredible emergency services who are working tirelessly to help those who need help and alleviate the situation – they are heroes and the whole of Italy is proud on them.
The decision that has been taken is the right one for everyone in the local communities and the F1 family as we need to ensure safety and not create extra burden for the authorities while they deal with this very awful situation.”
A statement from F1 read: "The Formula 1 community wants to send its thoughts to the people and communities affected by the recent events in the Emilia-Romagna region.
"We also want to pay tribute to the work of the emergency services who are doing everything they can to help those in need.
"Following discussions between Formula 1, the president of the FIA, the competent authorities including the relevant ministers, the president of the Automobile Club of Italy, the president of Emilia Romagna region, the mayor of the city and the promoter, the decision has been taken not to proceed with the grand prix weekend in Imola.
"The decision has been taken because it is not possible to safely hold the event for our fans, the teams and our personnel and it is the right and responsible thing to do given the situation faced by the towns and cities in the region. It would not be right to put further pressure on the local authorities and emergency services at this difficult time."
FIA President Mohammed Ben Sulayem added: “My thoughts and those of the entire FIA family are with those affected by the terrible situation in the Emilia Romagna region. The safety of everyone involved and recovery efforts are the top priority at this time.”
Italian deputy prime minister and transport minister Matteo Salvini had called to postpone the race in order to "dedicate ourselves to relief work".
It is thought very unlikely that the Emilia Romagna GP will be rescheduled for later in the year due to the congested calendar.
It means the schedule for 2023 has reduced by two rounds following the widely expected cancellation of the Chinese GP, which was set for 16 April but lost due to ongoing COVID-19 restrictions in the country. This created the four-week gap between the Australian and Azerbaijani rounds.
The Australian GP was notably cancelled in 2020 due to the pandemic outbreak, with that decision finally being made on the Friday morning ahead of free practice. F1 did also scrap the Saturday timetable for the 2019 Japanese GP due to the threat of Typhoon Hagibis. That meant qualifying was moved to Sunday morning ahead of the race.
The 2023 season will resume with the Monaco GP, which is scheduled for the 26-28 May weekend.
