The Catholic League For Religious and Civil Rights has been in the parade for 20 years but will not this year after organisers gave permission for the LGBT group to join.
Earlier this month New York's Cardinal Timothy Dolan has said he had no issue with the gay group joining the march which takes place in March.
Catholic League President Bill Donohue said: "My reasons for withdrawing from the parade have nothing to do with Cardinal Dolan or with gays.
"It has to do with being betrayed by the parade committee.
"They not only told me one thing, and did another, they decided to include a gay group that is neither Catholic nor Irish while stiffing pro-life Catholics."
Last year New York City Mayor Bill de Blasio refused to take part in the parade because a gay rights group was not allowed.
The parade organisers have yet to comment.