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Deal 'close' for Mugabe to leave ... has decided to pull out of the presidential run-off on 27 June, party officials have told the BBC.
The decision, taken at a meeting of the leadership of the Movement for Democratic Change in Harare, means Robert Mugabe will remain as president.
The MDC says the decision comes after at least 70 of its supporters have been killed in the run-up to the poll.
President Robert Mugabe says the opposition is behind the violence.
On Sunday, the opposition was due to stage a rally in the capital - the highlight of the campaign.
But supporters of Mr Mugabe's Zanu-PF occupied the stadium and roads leading up to it - and reportedly beat up opposition activists.
The MDC says Morgan Tsvangirai won the presidential election outright during the first round in March.
The government says he won more votes than President Mugabe, but not enough to win outright.
Mr Mugabe has said he will never accept a Zimbabwe run by the MDC.
On Saturday, South Africa sent two mediators to Harare, just days after its President, Thabo Mbeki, went to Zimbabwe himself, for separate talks with Mr Mugabe and Mr Tsvangirai.
The BBC's Peter Biles, in Johannesburg, says this was possibly a last effort to persuade Mr Mugabe to cancel the election run-off, and to persuade both sides to begin negotiations on a government of national unity.
It is widely accepted that in the present circumstances, with serious political violence, the election will not resolve Zimbabwe's problems, our correspondent adds.
The MDC says its members have been beaten, and its supporters evicted from their homes, forcing it to campaign in near secrecy.
The party's secretary general, Tendai Biti, is under arrest charged with treason.
Mr Mugabe has accused the MDC of acting in the interest of Britain, the former colonial power, and other Western countries.
Zimbabwe's other immediate neighbours have also added their voices to increasing international concern over the validity of the run-off.
(BBC)
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