Fears over the safety of players prompted the Guernsey Football Association’s council to take the shock decision.
In doing so, it overturned one taken by the executive board to play next summer.
The refusal follows the most shameful incident ever seen on a local ground at the 2003 match between the two islands at the Corbet Field.
Six players, five from Rhodes, were sent off by referee Wendy Toms which led to the match being abandoned and calls for the Greeks to be thrown out of the tournament.
Rhodes subsequently withdrew its team and imposed life bans on the guilty players.