Allianz had been seeking a deal to put its name on the stadium being built by both teams in the Meadowlands.
The deal could have been worth an estimated $30 million a year. The stadium is scheduled to be completed for the 2010 season.
Allianz once insured Nazi death camps and refused to pay life insurance claims to its Jewish clients -- instead granting the proceeds to the Nazis.
The proposed deal was criticized by Jewish organizations, Holocaust survivors and football fans who said seeing the company's name emblazoned on the stadium would be a constant reminder of the company's ties to the Holocaust.
The New Meadowlands Stadium LLC, the company building the stadium, issued a statement Friday saying they were no longer in discussions with Allianz for a naming rights partnership.
"We are continuing discussions with other potential partners for the new stadium and look forward to the summer 2010 opening of this new icon for our region," the statement read.
Allianz spokesman Peter Lefkin confirmed that talks were off.
"After Allianz SE in its board meeting on September 9 did not come to a conclusive commitment for an immediate agreement, The New Meadowlands Stadium decided not to further pursue talks," he said.
Allianz officials argued that the company had atoned for its former support of the Third Reich by supporting reparations programs and working to become a responsible company and good corporate citizen.
They said they should no longer be held accountable in 2008 for the company's record during World War II.
Abraham H. Foxman, national director of the Anti-Defamation League, which had criticized the proposed naming of the stadium, applauded the cancellation of talks.
"The decision shows sensitivity to the fact that the greater New York area is home to a large number of Holocaust survivors and their families and World War II veterans, who live with the painful memories of that time," he said in a statement.
Steven Korenblat, a St. Louis-based attorney who represented Citigroup in its naming rights deal for the New York Mets' new stadium, noted that other German companies such as Daimler-Benz and Deutsche Bank that had connections to the Third Reich have higher profiles in the U.S. than Allianz, though he said he was not aware of either purchasing stadium naming rights here.
"I don't think this is a made-up controversy," Korenblat said of the Allianz negotiations. "For those who have strong feelings about it, it's genuine. My view is that we should continue to remember the past and continue to speak the truth, but at the same time we should allow Germany and its corporate citizens to move forward."