The businessman announced in January that he was launching a talent series that would aim to find the world's best new DJ.
The show would have had a similar format to The X Factor or American Idol, with DJs looking to find success by fighting it out each week.
Cowell's Syco company had joined up with Will Smith and Jada Pinkett Smith's Overbrook firm.
However, Cowell has now confirmed that the show will not be produced as originally planned.
"Syco and Overbrook decided not to proceed together on a DJ-competition show," a spokesperson told the New York Post.
A source claimed that the show was axed after Cowell and the Smiths fought over who would receive top billing in the production credits.
Tiesto told Digital Spy earlier this year that the programme "could be a cool idea", but that he doubted Cowell's credentials for finding a top DJ.
Simon Cowell is said to have teamed up with will.i.am for a new technology-themed talent show.