Cannavaro decided to quit after just two matches in charge of the national team – both home losses to Thailand and Uzbekistan in the China Cup last month.
The 45 year-old was juggling his commitments as coach of Chinese Super League giants Evergrande after China turned to him to replace Marcello Lippi in March.
After Evergrande edged Chongqing Dangdai Lifan 1-0, Cannavaro confirmed his international exit.
"Out of respect for the country that has been hosting me for some years, I feel the duty to communicate that I have renounced my position as head coach of the Chinese National Football Team," Cannavaro wrote on Instagram.
"I wish to sincerely thank Guangzhou Evergrande Football Club and the Chinese Football Association for having offered me the position of the head coach of the two most important football teams in the country, however this double assignment would take me away from my family for too long.
"More than one month ago I informed my club about my intention to dedicate myself exclusively to my squad and my players. By maintaining only the position as head coach of Guangzhou Evergrande, I hope to contribute to the growth of young Chinese football players, working every day with passion and professionalism.
"I wish the Chinese National Team all the best for the qualifications to the Qatar 2022 FIFA World Cup. Thanks again to everybody."
Cannavaro, who returned to Evergrande in 2017 having been sacked in 2015, has overseen six wins from seven matches as the CSL powerhouse sits second and three points adrift of leader Beijing Guoan.
Evergrande is also on track to qualify for the AFC Champions League last 16, with Cannavaro's men second heading into the final two matchdays in Group F.