Town will not be entering a side in the Suffolk Premier Cup in 2013/14. The Blues re-entered the competition, in which they field a reserves team, last season after a two-year absence, losing 1-0 to Lowestoft at the semi-final stage.
Club secretary Sally Webb told the Suffolk FA website why the decision had been taken: "We have always enjoyed being part of the competition, and I am sure that our decision may disappoint local teams.
"However, when we entered the competition last year we did not know what our programme of games would be for the new EPPP Premier Academy League U21s.
"We had not been competing in the Combination Reserve League in the 2011/12 season and at the time welcomed the extra games.
"Having had a full season of Premier Academy League fixtures we feel that it is not appropriate to be part of the competition at this time.
"Many of our U21s games had to be changed and it is difficult to fit the county cup fixtures in as they have to be played at specific times.
"The U21s have to travel far and wide to fixtures, and scholars are also undergoing education which has to take priority.
"A lot of professional clubs don’t take part in their county cup competitions for all sorts of reasons, but we have always been pleased to do so.”
Suffolk FA chief executive Laura Smith added: "Whilst we are disappointed, as no doubt the participating clubs will be, that Ipswich Town will not be competing in next season’s competition, we fully understand their reasons.
"Ipswich Town’s presence enhances the profile of the competition as well as giving the non-league clubs the possibility of against the county’s professional team and the obvious benefits that this brings with it.
"However, it is anticipated the Premier Cup, along with three of our other county cups, will still culminate in the showpiece final at Portman Road courtesy of Ipswich Town at the end of the season.
"We are excited to work in partnership with Ipswich Town in the forthcoming season and would like to take this opportunity to wish Mick McCarthy and his team every success.”