The annual competition was expanded from two teams to six in 2015, with the top three Super League clubs facing their Southern Hemisphere counterparts.
But the format may now revert to one match featuring the two champions - Cronulla Sharks and Wigan Warriors.
NRL clubs completed a 3-0 whitewash over Super League teams in 2016.
Reports suggest a number of other NRL clubs are set to reject any invitation to take part in the competition.
Storm chief executive Dave Donaghy said: "We've decided that staying in Australia will provide our team with the best possible preparation for the 2017 NRL season.
"Having treasured past visits to the UK in 2008, 2010 and 2013, we thoroughly value the concept of the World Club Challenge. However, a regular NRL season is already incredibly taxing and, as a non-Sydney team, our players travel more than most.
"We have committed to playing two trial matches in Australia which we believe will serve as a better lead-in for the team."
NRL runners-up Melbourne Storm have rejected the opportunity to play in the 2017 World Club Series, preferring to stay in Australia during pre-season.