Announcement comes after the Australian state of Victoria withdrew as host last year over cost concerns.

Minister of Youth and Sports Hannah Yeoh said on Friday that the government made the decision after concluding that the Commonwealth Games Federation’s offer of 100 million pounds ($126.21m) in supporting funds would not cover the entire cost.

“The government wants to focus on the development of sports as well as the welfare and well-being of the people,” Yeoh said in a statement.

The proposal had received a mixed response in Malaysian amid concerns over the economy and bread-and-butter issues, including a sharp decline in the value of the ringgit.

Malaysia’s Olympic Council had previously proposed hosting a scaled-down version of event.

Malaysia was asked to host the event after the Australian state of Victoria withdrew last year after claiming the estimated cost had blown out by 6.9 billion Australian dollars ($4.5bn).

A report by Victoria’s Auditor-General’s Office released on Wednesday found that the cost estimate that resulted in the event’s cancellation was “overstated and not transparent”.

The Commonwealth Games brings together athletes from more than 70 nations and territories, most of them former constituents of the British Empire.

The 2022 event was held in Birmingham in the UK after South Africa’s Durban was stripped of hosting rights for failing to meet criteria set down by the event’s governing body.

Malaysia, which declared independence from the British in 1957, hosted the 1998 Commonwealth Games in Kuala Lumpur, becoming the first Asian country to put on the event.