The September 12-28 tournament now looks likely to be relocated or postponed over security fears when the International Cricket Council (ICC) meets on the matter on Sunday.
"We are deeply disappointed and when a decision was to be made on Sunday we think South Africa made a hasty choice," Pakistan Cricket Board chief operating officer Shafqat Naghmi told AFP.
Naghmi was in Dubai to make a last ditch effort to save the tournament after players' associations from Australia, New Zealand, South Africa and England urged their cricketers not to tour the troubled country.
Cricket South Africa's decision came a day after a double suicide bombing outside a huge arms factory near Islamabad, the deadliest attack on a military site in Pakistan's history, killed 64 people.
"After extensive discussions and a frank exchange of views, the board resolved not to send our team at this time to Pakistan to participate in the ICC Champions Trophy," Cricket South Africa president Norman Arendse said in a statement.
"We respect the right of the Pakistan Cricket Board to stage the tournament and we would urge the ICC to reschedule the tournament as soon as possible," added Arendse.
But Naghmi said South Africa was a major cricketing nation and its refusal to take part would hurt the event badly.
"Now it's up to the ICC to take a decision which they would take on Sunday but I would say that South Africa's refusal will badly hurt the event. We will still do our best to save the event and host it on schedule," he said.