"I have decided we need a full review of the plans and must go back to the drawing board," Abe told reporters after meeting Tokyo 2020 president Yoshiro Mori, sports minister Hakubun Shimomura and Olympics minister Toshiaki Endo.
"We have looked at the logistics and construction period and I have made this decision because I was assured that we can definitely complete construction on time."
The 2019 rugby World Cup, to be held in Japan, became the first casualty of Friday's decision with organisers now forced to consider alternative venues in Tokyo or Yokohama for games, including the tournament final.
Construction costs for the new National Stadium have ballooned by nearly twice the original budget to 252 billion yen ($2.03 billion), which puts it on track to become the world's most expensive sports venue.
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