The rugby world was stunned when two Paris clubs announced last week their intention to merge.
Fans and players of the two teams voiced their concerns at the proposals which were outlined by presidents Jacky Lorenzetti and Thomas Savare.
The club has succumbed to protests, strike action and the postponement of the clubs' league fixtures, and decided to pull the pin on the proposed merger.
"I heard the emotion, the surprise and the misunderstanding of the supporters, the players and the members of our association," Stade Francais chief Savare said.
"I also heard their deep attachment to the independence of Stade Francais, this attachment coming above all other considerations.
"So we have decided, in agreement with Jacky Lorenzetti, to put an end to this proposed merger."
Racing president Lorenzetti said: "I have decided to give up this beautiful project. I did not expect such resistance, especially internally!