The U.S. Embassy says the new building cost $1 billion, funded entirely through the sale of other U.S. properties in London.
In his tweet, the president maintained the decision was down to his disapproval of the U.S. embassy moving from its old central London location to a new site south of the river.
President Donald Trump's decision to forgo a visit to London to open a new United States embassy kindled doubts about his justification for staying away - even from his own nation's diplomats. "It seems he's finally got that message", wrote London's mayor, Sadiq Khan, on Twitter in response to Trump's message about his travel cancellation.
Others thought Trump wouldn't be content with how regal his visit might be. The Daily Mail reported that Trump had backed out because he was unhappy about arrangements for the visit, which was billed as a "working" visit rather than a full state visit that could include a meeting with Queen Elizabeth.
In his tweet Mr Trump said: "Reason I cancelled my trip to London is that I am not a big fan of the Obama Administration having sold perhaps the best located and finest embassy in London for "peanuts", only to build a new one in an off location for 1.2 billion dollars".
The George W. Bush administration had decided more than a decade ago to relocate the embassy from offices on prime land in the tony neighborhood of Mayfair in central London to a plot on the banks of the Thames in the south of the city.
"I think we have to welcome the American President to Britain", Johnson said. The uproar came after Trump re-tweeted three anti-Muslim videos posted by a leader of the far-right group Britain First - a tiny group that regularly posts inflammatory videos.
In Washington, White House spokeswoman Sarah Huckabee Sanders said Trump's comment was exclusively about an embassy-related visit.
Trump's cancellation was met with humour on social media, with parodies of the president's tweet trending on Twitter.
"Let's hope that Donald Trump also resists the pursuit of his divisive agenda". That message was echoed by David Lammy, a lawmaker for the opposition Labour Party, who believed Trump was shaken by the prospect of being "met by millions of us out on the streets protesting". But Foreign Secretary Boris Johnson blamed Khan and Labour Party leader Jeremy Corbyn for discouraging the US leader from coming.
"The US is the biggest single investor in the United Kingdom, yet Khan and Corbyn seem determined to put this crucial relationship at risk", he tweeted.
A Number 10 source said: "Boris expresses himself in his own inimitable way, but we agree that any risk to the crucial US-UK relationship is not in our country's best interests".