Iran is yanking its entry in the Oscars foreign film race because of the "intolerable insult" of the US-made anti-Islam film that has angered Muslims.
Oscars organisers had not heard officially from Iranian authorities, after the announcement in Tehran by Culture Minister Mohammad Hosseini.
"I am officially announcing that in reaction to the intolerable insult to the Great Prophet of Islam we will refrain from taking part in this year's Oscars and we ask other Islamic nations to show their protest like this," the minister said.
Iran was pulling its sole film entered in the Academy Awards, A Cube of Sugar, after discussions with its producers, he said.
The move reflected Iran's fury over the low-budget film Innocence of Muslims made by extremist US Christians that ridicules the Prophet Mohammed.
The US government has stressed it had nothing to do with the film but said adherence to freedom of expression meant it could not censor it.
Several non-violent protests have taken place in Tehran.
In the last Academy Awards, held in February this year, an Iranian film, A Separation, won the Oscar for best foreign language film.