The gravel rally had been scheduled as the fourth round on April 16-19. The championship starts this week in Monte Carlo.
The decision means the subsequent round in Argentina, initially scheduled from April 30 to May 3, has been brought forward by one week to give more time to ship freight afterwards.
Media reports last year cited political and social unrest in Chile as the reason for organisers seeking cancellation. The all-electric Formula E series held the third round of its championship in Santiago last weekend, however.
Rally Chile joined the world championship in 2019 and the event was based around the port city of Concepcion, some 440km south of Santiago. (Reporting by Alan Baldwin, editing by Christian Radnedge)