In a vote on Thursday, Rome City Council officially withdrew its bid to host the 2024 Olympic Games after the city's grassroots mayor Virginia Raggi said she was opposed to the project on financial grounds.
The assembly approved a motion against hosting the Olympics by 30 votes in favour (including 29 councillors from Raggi's ruling Five Star movement) and 12 against.
Raggi dealt Rome's Olympic candidacy a death blow last week when she said would be "irresponsible" for the cash-strapped capital.
"We are effectively asking the people of Rome and of Italy to shoulder the debts (accrued by hosting the Games). We just don't support it," she stated.
Rome's previous centre-left administration had backed the bid, as did Italian premier Matteo Renzi, but the International Olympic Committee requires bidders to have support from the government and the candidate city.
Rome's withdrawal leaves Paris, Budapest and Los Angeles still in the running to hold the 2024 Olympics.
The IOC will choose the host city in September 2017.
Raggi, who was elected in a landslide victory in June, campaigned with the message that an Olympic bid was unsustainable for a city struggling to leave behind years of corruption and poor public services.
During her campaign, Raggi promised to fix Rome's transport, garbage and corruption scandals and said the city needed to focus on everyday issues before taking on "extraordinary events" like the Olympics.
It is the second time in four years that Rome's Olympic bid has collapsed. In 2012, then-premier Mario Monti nixed the city's plans to bid for the 2020 Olympics on economic grounds.
The costs for hosting the Olympics in Rome had been estimated at 11.14 billion euros .