Delhi's 2010 Commonwealth chief Suresh Kalmadi said it would be inappropriate for him to be honorary life president of India's Olympic body.
The sports minister had described the appointment as "totally unacceptable".
Mr Kalmadi is awaiting trial on charges of cheating, forgery and criminal conspiracy. He denies the charges and has pleaded not guilty.
The Congress party politician was sacked from his Commonwealth role in 2011 and spent 10 months in jail before being freed on bail.
"I thank the Indian Olympic Association for conferring the honour of life president on me," Mr Kalmadi said in a letter to Indian Olympic Association (IOA) President N Ramachandran.
"However, I do not feel that it would be appropriate for me to accept this honour at this time. I am confident that my name will be cleared and I will defer acceptance of the honour till such time."
The sports ministry had threatened to cut off ties with the IOA, if it did not reverse the offer of honorary life roles to Mr Kalmadi and another politician facing corruption charges, Abhay Singh Chautala.
Indian social media users ridiculed the offers.
"Suresh Kalmadi & Abhay Chautala have been rewarded for India's terrific performance in the Olympics over the last several years," wrote one commentator, referring to his country's poor record in recent games.
"Yes, Indian Olympic Association, let's motivate our athletes by making #SureshKalmadi their president," wrote another.
Others suggested prominent people they felt would be similarly ill-suited to influential positions because of their backgrounds, with one such tweet suggesting former porn star Sunny Leone should head India's film censors.
A senior Indian politician charged with corruption has turned down an honorary Olympic role amid a storm of protests.