The decision puts an end to South Korea’s hopes of using the Games to engage with the North amid stalled cross-border talks.
In 2018, both sides entered a joint team at the Winter Olympics which led to a series of historic summits.
Pyongyang says it has no cases of the virus but experts say this is unlikely.
The announcement makes North Korea the first major country to skip the delayed 2020 Games because of the pandemic. The event is due to begin on 23 July.
This will be the first time North Korea misses a Summer Olympics since 1988, when it it boycotted the Seoul games during the Cold War.
The decision was made at a Olympic committee meeting on 25 March, according to a report by the state-run site Sports in the DPRK.
North Korea has taken stringent measures against the virus since it broke out last year.
It shut off its borders in late January and later quarantined hundreds of foreigners in its capital.
Since early last year, trains and wagons have been forbidden to enter or leave North Korea, with most international passenger flights stopped as well.
