The live broadcast of John Adams's The Death of Klinghoffer was scheduled for 15 November.
The opera set to be performed this autumn portrays the hijacking of the Achille Lauro cruise ship by the Palestine Liberation Front in 1985.
Jewish American passenger Leon Klinghoffer was killed in the attack
"I'm convinced that the opera is not anti-Semitic," the Met's General Manager, Peter Gelb, wrote in a statement.
"But I've also become convinced that there is genuine concern in the international Jewish community that the live transmission of The Death of Klinghoffer would be inappropriate at this time of rising anti-Semitism, particularly in Europe."
The decision was taken after discussions between Mr Gelb and the Anti-Defamation League, which represented Klinghoffer's children.
Mr Adams criticised the decision, telling Associated Press news agency the opera "in no form condones or promotes violence, terrorism or anti-Semitism".
The Achille Lauro had been sailing the Mediterranean on 7 October 1985 when the gang - members of a splinter group of Yasser Arafat's Palestinian Liberation Organisation - attacked.
During a two-day standoff, the group demanded the release of a number of Palestinian prisoners and killed Klinghoffer, 69, before throwing him overboard.
The Palestinian militants initially escaped after allowing the Achille Lauro to dock in Egypt.
Later, the US military intercepted an Egyptian plane which the hijackers were using to flee and forced it to land in Sicily, where the four hijackers were arrested.
Youssef Magied al-Molqui, the leader of the group which overtook the Achille Lauro, was released from an Italian prison in 2009 after serving nearly 24 years.
New York's Metropolitan Opera has cancelled plans for a global HD broadcast of a performance amid fears it could spark anti-Semitic sentiment.