The 16-acre site close to the Phoenix Park will be left empty and derelict.
This has led to fears that it will become a wasteland and a focus for anti-social behaviour.
Council bosses plan to rehouse the last 44 residents in the coming months.
The council has been unable to "structure the necessary financial arrangements" to complete the regeneration project.
The news was described as a "devastating blow" to the residents today, with tenants accusing Dublin City Council of "letting them down yet again".
The 1950s complex was one of five social housing schemes due to be developed under a private public partnership (PPP) between developer Bernard McNamara and the city council.
But McNamara, a former Fianna Fail councillor, walked away from the scheme in 2008.
The council then announced plans to go ahead with the scheme on its own and secured the backing of An Bord Pleanala to construct 110 units.
Fifty of the units would be private, with the remainder being built by the council for social housing.
But fresh documents now confirm that the troubled flat complex will be emptied, with new homes due to be found for the remaining 44 tenants.
"The city council has reviewed if the project could be advanced in a sustainable way in line with the Master Plan and without the private units, which are core to the proposal approved by An Bord Pleanala.
"It has concluded that to build only 60 social units on the 16-acre O'Devaney Gardens site would not be sustainable," the documents state.
A city council spokeswoman said it was impossible to say when the site might be used again.
"The site when fully vacated will be maintained by DCC pending its future redevelopment," she said.
"It is not possible at this time, due to the current housing market conditions and general economic climate, to give an indication as to when redevelopment will commence."
But Councillor Cieran Perry has criticised the decision to abandon the project.
"It is disgraceful that the residents of O'Devaney Gardens have been let down yet again.
"Almost 10 years ago the tenants were promised a regenerated complex with a good social mix of public housing, affordable private housing, shops and community facilities.
"Now they are left in limbo while waiting to be rehoused and we have lost almost 300 public housing units."
O'Devaney Gardens has been plagued by crime in recent years.
The complex was the scene of riots during the summer of 2008. Violence peaked in the August when a brawl broke out that resulted in dozens of gardai being called out.