The result shows a victory for shareholders, and comes three weeks ahead of the planned vote on the proposal.
'However, we recognise that the proposal has not received support from a significant group of shareholders and therefore consider it appropriate to withdraw'.
The climbdown comes three weeks ahead of a vote on the plan and is a significant victory for United Kingdom shareholders big and small who opposed the move, which would have kicked the maker of Dove soap and Ben & Jerry's ice cream out of the benchmark FTSE 100 index.
The board continues to believe that simplifying our dual-headed structure would, over time, provides opportunities to further accelerate value creation and serve the best long-term interests of Unilever.
Investors had criticised the decision abandon the UK-Dutch stock market listing, saying that a single Rotterdam HQ could force UK shareholders to sell their shares.
Unilever's board, led by Chairman Marijn Dekkers and fellow Dutchman Paul Polman, the chief executive, agreed to scrap the plan during a call early on Friday after it became clear that it could fall short of the approval needed, a source familiar with the matter said.
The decision followed a failed hostile bid by U.S. rival Kraft Heinz a year ago, which analysts said played a key role in Unilever's decision as the Netherlands has stronger rules to protect companies against takeovers.
Unilever said it engaged with over 200 shareholders about its proposal, and said it had broad support from a lot of them, who agreed that a single structure, with a single pool of equity, would be simpler and more efficient.
Hurricane Leslie heads north in Atlantic Ocean
The National Hurricane Center in Miami says Hurricane Leslie is beginning to turn northward far out in the Atlantic Ocean. Swells from Leslie are also being felt at the US East Coast, the Bahamas and most of the Greater and Lesser Antilles.
For almost a century since, Unilever has maintained a dual-headed structure and listings on the London, Amsterdam and NY stock exchanges.
Dutch Prime Minister Mark Rutte said Friday he would reconsider a controversial tax break aimed at luring foreign firms after Unilever axed plans to move its headquarters to the Netherlands.
'The board will now consider its next steps and will continue to engage with our shareholders.
But in March, the company announced it was choosing The Netherlands over London to host its headquarters, dealing a blow to Britain's efforts to keep multinational companies following Brexit.
Sources said Unilever probably knew that recommendation before it was made public, which could have signaled that further shareholder defections were likely. He added that the company will proceed with the plan to cancel its Dutch preference shares.
"This change should not really affect the group's near-term operation, although it may lead to a faster pace for CEO succession planning", he said.
The cabinet is to reconsider the controversial plans to scrap the tax on dividends, prime minister Mark Rutte said at his weekly press conference on Friday.
Unions had also come out against Unilever's planned move, arguing that it was vital for the maker of Ben & Jerry's ice cream and other companies to stay in the UK. The company's United Kingdom -listed shares fell as much as 1% early Friday.