Hawking, 71, had accepted an invitation to headline the fifth annual president's conference, Facing Tomorrow, in June, which features major international personalities, attracts thousands of participants and this year will celebrate Peres's 90th birthday.
"This is his independent decision to respect the boycott, based upon his knowledge of Palestine, and on the unanimous advice of his own academic contacts there," said a statement from the British Committee for the Universities of Palestine (BRICUP), said to be approved by Hawking.
In the end, Hawking told friends, he decided to follow the advice of Palestinian colleagues who unanimously agreed that he should not attend.
Hawking is in very poor health, but last week he wrote a brief letter to the Israeli president to say he had changed his mind.
"The situation is that he's discussed it with fellow academics and has decided, for personal reasons, not to attend the conference in June," a Cambridge University spokesperson said.
"The academic boycott against Israel is in our view outrageous and improper, certainly for someone for whom the spirit of liberty lies at the basis of his human and academic mission," conference chairman Israel Maimon said in a statement.
The Fair Play group, which campaigns against boycotts of Israel, described the scientist's withdrawal as "bizarre".
"Prof. Hawking could have joined the conference and explained his views on the conflict in the region, just as many other participants have done. By boycotting the conference, he has thrown away this opportunity and will help nobody," a spokesperson said.
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