Salah al-Obaidi, the spokesman for Sadr, said the cleric issued his decision in a statement following a meeting with Sistani and Ayatollah Kazem al-Haeri in Qom, Iran.
The statement reiterated Sadr's call for an end to the apparent politically motivated violence in Iraq by urging all parties to solve their issues through comprehensive dialogue, Voices of Iraq said.
Sadr called on Iraqi Prime Minister Nouri al-Maliki to demand U.S. forces leave Iraq, or at least draft a timetable for their withdraw, rather than insisting the Mahdi Army disband.
Maliki on Monday said Sadr needed to disband his forces or face a ban on participating in provincial elections in October.
The statement also encouraged the Iraqi government to improve its efforts to provide basic goods and security for the Iraqi people.
Obaidi said Sadr honored his pledge to keep his forces at bay, but noted Maliki had no right to decide who can participate in the political process.
He reminded Maliki those decisions are left to the Iraqi parliament or the independent electoral commission, and not the prime minister.