"After much thought and deliberation, we've decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens," Jodi Seth, an Amazon spokeswoman, said in a statement.
In the statement, Amazon noted that "a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City."
Amazon selected New York City and Northern Virginia in November to split duty as its second headquarters (nicknamed HQ2) after a year-long search. Each city was expected to have more than 25,000 workers over time.
The new headquarters was initially framed by top New York politicians including Governor Andrew Cuomo as a tremendous job creation opportunity that could benefit the broader New York region. All at once, it seemed to cement New York City as a technology hub that could truly rival Silicon Valley.
After the deal was announced, however, critics blasted the $1.525 billion in incentives New York offered to lure the tech behemoth and worried that it would soon lead to longtime residents being priced out of their homes. Protesters took to the streets in Long Island City, criticizing the deal for being bad for taxpayers and the neighborhood.
Amazon's decision on Thursday was met with a mix of disappointment and jabs from politicians frustrated by the company's decision to walk away rather than engage with the community's concerns.
Carolyn Maloney, a New York congresswoman, said she was "disappointed" New York would lose out on 25,000 jobs and "hundreds of millions of dollars in new investments."
Others like Alexandria Ocasio-Cortez, the progressive freshman Congresswoman from New York, hailed Amazon's withdrawal as a victory for members of the community who protested the deal in recent months.
The pushback against the Amazon deal was helped this month when New York State Senator Michael Gianaris of Queens, who is a vocal critic of HQ2, was recommended to serve on the Public Authorities Control Board.
The relatively unknown board weighs in on any financing and land use deals that run through public authorities, which primarily include economic development projects. It's had some success in the past blocking major projects.
While New York's politicians, longtime residents and real estate investors digest Amazon's stunning reversal, officials in other states may see opportunity knocking.
Phil Murphy, the governor of neighboring New Jersey, wasted no time in calling for Amazon to reconsider his state for new offices now that New York is out of the running.
In its statement, Amazon said it has no plans to "reopen the HQ2 search at this time." Instead, it plans to move forward with its office expansions in Virginia as well as Nashville, where it is building a new hub expected to employ 5,000 people.
That makes Virginia the clear winner of Amazon's very public HQ contest.
"We are excited that Amazon's plans for Virginia remain in place and that we can continue working together to position Virginia's dynamic tech sector for healthy, sustained, statewide growth," Stephen Moret, the CEO of the Virginia Economic Development Partnership who helped spearhead the HQ2 negotiations for the region, told CNN Business.
Moret declined to say whether he expects Amazon to add even more jobs to Virginia now that it's forfeiting its major investment in New York.
Now the city must grapple with the fallout of what the scuttled deal could mean for its future as a business-friendly destination and a center for technology companies in particular.
"New York City is today one of the most dynamic tech hubs in the world, but there is no guarantee we will maintain this status in the future, which makes this news so disappointing," said Julie Samuels, Executive Director, Tech:NYC, a non-profit network of technology leaders in the city that counts Amazon as a member.
"New York City is still open for business and will retain its status as a world class center for tech and innovation," John H. Banks, president of the Real Estate Board of New York, said in a statement.
CNN's Alison Kosik and Lydia Depillis contributed reporting.