"I've decided against returning to competitive wrestling," the Chechen, who turned 37 last month, was quoted as saying by local media on Saturday. "I may go to London as a fan to support my team-mates."
Saitiev announced his retirement soon after claiming his third Olympic title in freestyle wrestling in Beijing in 2008, but then changed his mind and decided to make a comeback.
But he found it hard to make the Russian team for London with several former world and Olympic champions vying for a single spot in the 84 kg weight class.
In addition to three Olympic (1996 Atlanta, 2004 Athens and 2008 Beijing) Saitiev has also won six world titles.
Only fellow-Russian Alexander Karelin and Alexander Medved of the Soviet Union have also won three Olympic titles in wrestling.
Saitiev and Karelin were voted the best wrestlers in the history of the sport by the International Wrestling Federation in 2007.