Lam said the Chinese government supported postponing the election under its Emergency Regulation Ordinance.
"The announcement I have to make today is the most difficult one I have had to make in the past seven months," Lam said at a news conference Friday. "We want to ensure public safety and health, and to make sure the elections are held in an open and impartial manner. The decision is therefore essential."
Lam said Hong Kong's government would need to recruit 34,000 electoral officers just to put on the election, which would also attract large crowds, and distancing rules would make it difficult for candidates to campaign.
The postponement comes a day after 12 pro-democracy candidates learned they were disqualified from running for office. Some of the disqualified candidates include Civic Party leader Alvin Yeung and supporters Joshua Wong, Dennis, Kwok, Kwok Ka-Kiand Tat Cheng.
The disqualifications also affected current lawmakers, such as the incumbent Yeung, who was told he can't run again.
Critics say Lam used the same statute, which dates back to British colonial rule, last year to ban protesters from wearing masks to hide their identities. Mass protests were staged in Hong Kong for much of 2019 to oppose a controversial extradition law and draw attention to other issues.
"COVID has presented a remarkably convenient excuse, but also a very shallow one," Sophie Richardson, the China director at Human Rights Watch, said, noting that the crisis has become a tool to suppress political dissidents in both Hong Kong and mainland China.
"Postponing the September elections for a year is a cynical move to contain a political emergency, not a public health one," Richardson tweeted. "This simply allows Hong Kong Chief Executive Carrie Lam to deny Hong Kong people their right to choose their government.
"Without making any attempt to look at alternative methods of voting or ensuring all voting rights will be respected, Lam and her backers in Beijing are merely masking repression under the guise of public health."