Michael said he will complete his October concert dates in Britain and then undergo treatment for his condition, the BBC reported Sunday.
The former Wham singer said he has "major anxiety" after suffering from life-threatening pneumonia last year, which landed him in a Vienna hospital for a month.
"I have tried in vain to work my way through the trauma that the doctors who saved my life warned me I would experience," Michael said in a statement.
"They recommended complete rest and the type of post-traumatic counseling which is available in cases like mine but I'm afraid I believed (wrongly) that making music and getting out there to perform for the audiences that bring me such joy would be therapy enough in itself," he added.
The remaining tour dates in Britain and Australia are part of Michael's "Symphonica" tour, which was put on hold last November when he became ill.