Obama was to deliver an address in Malaysia on October 11 as part of a four-country swing through Southeast Asia including international summits in Indonesia and Brunei.
But he will now be replaced by US Secretary of State John Kerry, Najib's office said.
It was not immediately clear whether the budget crisis in Washington would cause the US president to also skip the long-planned annual summit meetings.
During those gatherings, Obama is expected to push for final agreement on an Asia-Pacific trade agreement while underscoring his administration's much-touted renewed economic and security focus on Asia.
A spokeswoman in Najib's office confirmed Malaysian media reports that quoted the premier announcing Obama's visit was off.
"Obama expressed his disappointment that he was unable to visit Malaysia as scheduled," Najib was quoted as saying by the Malaysian Insider news website.
"However, the Secretary of State John Kerry will come... as Obama's representative."
The spokeswoman said Kerry would step in for Obama for his planned speech at an entrepreneurs summit in Kuala Lumpur on October 11.
She declined further comment.
The US president was to attend back-to-back summits of the Asia-Pacific Economic Cooperation (APEC) bloc on the Indonesian island of Bali and an East Asia summit in Brunei next week.
The Philippine government refused to comment on whether a planned stop by Obama in Manila would be affected.
"As of yesterday, the trip was still proceeding and pushing through. But given the situation (in the United States) we would certainly understand if they had to cancel," Philippine government spokesman Ricky Carandang told AFP.
The White House has not yet announced any changes to Obama's travel plans.
White House spokesman Jay Carney on Tuesday had indicated that Obama remained intent on pressing ahead with the summit appearances.
"He does believe that it is part of his job as Commander-in-Chief and President to travel to Asia and elsewhere to help create more economic opportunity for the American people, and also to create more national security opportunity for the United States," Carney told reporters.