Akon, who expressed regret and said he was not previously aware of the statue in the video, would have been the highest profile international singer to come to this predominately Buddhist, Indian Ocean island since the end of a brutal 25-year civil war last year.
Sri Lanka said Wednesday it would not issue Akon a visa for next month's concert, and his booking firm confirmed the show had been postponed amid growing outrage at the singer here.
A mob on Monday hurled stones at a private broadcaster that was helping sponsor the event and a "We Hate Akon" page on Facebook had attracted more than 12,000 members by Wednesday evening.
In the video, "Sexy Chick," women in bikinis are shown dancing at a pool party with a Buddha statue occasionally visible in the background.
The video "triggered a lot of disappointment among Buddhists all over the world," the government said in a statement explaining why it would not give Akon a visa.
Akon said he was "disheartened" to hear of the media attack and didn't mean to offend any religion.
"I was not aware that the statue was even on the set of the video until now. I would never set out to offend or desecrate anyone's religion or religious beliefs," he said in a statement.
Akon's international booking firm, American Talent Agency, said it hoped to reschedule the concert after ensuring the safety of the singer and his fans.
"Akon is looking forward to performing for the people of Sri Lanka and we hope to have this situation resolved in the coming weeks," the agency said in a statement.
Concert promoter Lasantha Samarasinghe said Wednesday he will ask the government to reconsider its decision, adding that the concert would boost tourism and help the country's economy.
Some 70 percent of Sri Lanka's 20 million people are Buddhists, and the faith has guaranteed prominence under the constitution.
AP Music Writer Nekesa Moody in New York contributed to this report.
By Krishan Francis