Malaysia and India have been nominated as alternative venues to host the event.
"It was an extremely hard decision and one we took with many regrets for the Pakistan hockey community," said International Hockey Federation (FIH) president Els van Breda Vriesman in a news release on Wednesday.
"During the last few months we tried everything we could to keep the Champions Trophy in Pakistan. This was unfortunately impossible due to circumstances not related to hockey or sport and completely beyond the control of the FIH and the Pakistan Hockey Federation."
Violence has escalated in Pakistan after a peace deal between Islamic militants and the government broke down.
Several hundred people have been killed since July, mainly in the north west, but more than 50 people have been killed in suicide blasts in Islamabad and the nearby city of Rawalpindi.
Olympic champions Australia and Asian champions South Korea had already pulled out of the Dec. 1-9 event because of security concerns while Spain also informed the FIH it would not be able to take part.
