Hawking, 71, is the world-renowned theoretical physicist and Lucasian Professor of Mathematics at the University of Cambridge.
Hawking is in very poor health, but last week he wrote a brief letter to the Israeli president to say he wouldn’t attend the conference.
He has not announced his decision publicly, but a statement published by the British Committee for the Universities of Palestine with Hawking's approval described it as "his independent decision to respect the boycott, based upon his knowledge of Palestine, and on the unanimous advice of his own academic contacts there".
Hawking's decision marks another victory in the campaign for boycott, divestment and sanctions targeting Israeli occupying regime academic institutions.
In April, the Teachers' Union of Ireland became the first lecturers' association in Europe to call for an academic boycott of Israel, and in the United States members of the Association for Asian American Studies voted to support a boycott, the first national academic group to do so.
By participating in the boycott, Hawking joins a growing list of British personalities who have turned down invitations to visit the occupied lands of Palestine, including Elvis Costello, Roger Waters, Brian Eno, Annie Lennox and Mike Leigh.
Professor Noam Chomsky, a prominent supporter of the Palestinian cause, has said that he supports the "boycott and divestment of firms that are carrying out operations in the occupied territories" but that a general boycott of Israel is "a gift to Israeli hardliners and their American supporters".