His decision came a month after he announced his participation in the fifth President's Conference dubbed "Facing Tomorrow," which is scheduled for Jerusalem next month, the British newspaper The Guardian reported Wednesday.
Many world leaders will attend the conference, which will also mark the 90th birthday of Israeli President Shimon Peres.
Hawking, 71, wrote to Peres announcing his decision, the newspaper said.
While Hawking didn't make a public statement, the British Committee for the Universities of Palestine, with his approval, posted a statement on its website saying it was Hawking's "independent decision to respect the boycott, based upon his knowledge of Palestine, and on the unanimous advice of his own academic contacts there."
In the past four weeks since Hawking announced his participation at the conference, he was sent many letters asking him to pull out, the Guardian said.
Peres' office didn't respond but conference organizer Israel Maimon called Hawking's boycott "outrageous."
"The use of an academic boycott is outrageous and improper, especially by those for whom the spirit of liberty is at the basis of the human and academic mission," he said in a statement.
The move marks another victory for the academic boycott on Israel, the Guardian noted. In April, the Teachers' Union of Ireland called to boycott Israel and in the U.S. members of the Association for Asian American Studies voted to support the boycott.
The British Committee for the Universities of Palestine says it is calling for an academic boycott of Israel " to oppose the continued illegal Israeli occupations of Palestinian lands ... and its persistent suppression of Palestinian academic freedom."