Last week, the licence commission of the cycling's world governing body rejected Katusha's application to compete in the top flight next year because of the team's doping record over the past four years.
"It just doesn't make any sense to stage the Tour of Russia under the current circumstances," Alexander Gusyatnikov, an advisor to Russian cycling chief and Katusha boss Igor Makarov, said.
"We have a verbal agreement with the UCI to stage the Tour of Russia in 2014, although we haven't signed a contract yet.
"The idea was to stage a major race in Russia on an annual basis, starting in 2014, so that Katusha could compete on home soil and Russian fans could watch our best riders in person."
Katusha, who finished second in the World Tour standings this year and have world number one Joaquim Rodriguez of Spain (pictured) riding for them, have appealed to the Court of Arbitration for Sport.
UCI president Pat McQuaid has been trying to make cycling a global sport by staging major races around the world.
"We have a Tour of Russia coming up in 2014, we have had a lot of discussions and India will be another place. Brazil is certainly a market because of the 2016 Olympics," McQuaid said this month.
"These are huge markets. If we get in with big events it can motivate a focus on the development of the sport."
Earlier this year, the Russian cycling federation, unveiled an ambitious project involving staging the first major race in the world's largest country.
"The original plan was to have something like a smaller version of the Tour de France," Gusyatnikov said at the time.
"It would start in St Petersburg, continue to Moscow, then riders would fly to Sochi for another three or four days through the Caucasus mountains."
Gusyatnikov said the FVSR wanted to benefit from the much-improved infrastructure in the Black Sea resort of Sochi, the host city of the 2014 Winter Olympics, to stage their event.
"Sochi will have good roads, hotels and everything else we would need for the staging of the Tour of Russia. Now, this whole project is in big doubt," he said.
- Sports & Recreation