The Central Election Commission said it had advised Mr Abbas to put off the election since the rival Hamas Islamist group ruling some 1.5 million Palestinians in the Gaza Strip had warned it would not allow them to vote.
"We met today and we decided to tell the president, who called these elections, that we cannot have elections at the time he scheduled them," said commission head Hanna Naser.
Naser said the commission had tried to persuade Hamas to allow it to come to Gaza to prepare for the election but was rejected by the Islamists, who are arch rivals of Abbas and his more secular Fatah movement.
A senior Fatah official said Abbas would "adhere to the decision of the commission" and put off the presidential and parliamentary polls, which he had scheduled for January 24.
An official announcement was expected sometime in the coming days.
Postponement will avoid a step that was destined to cause a permanent split in the deeply divided Palestinian movement. It will also delay a final decision by Abbas on his own future, after he suggested this month he might not seek reelection.
Abbas had set the election date after Hamas refused to sign a reconciliation pact drawn up by Egypt following more than a year of frustrating mediation efforts between the two hostile Palestinian factions.
The pact would have scheduled elections for June 2010.