Anders Olsson, the acting permanent secretary of the Stockholm-based body, announced that the 2018 prize would instead be given in 2019, a decision that "was arrived at in view of the now diminished Academy and the reduced public confidence in the Academy", according to a statement.
Technically, members are appointed for life to the Swedish Academy and cannot resign, although they can refuse to take part. "The Nobel Foundation supports the Swedish Academy's decision".
The decision of the academy "underscores the seriousness of the situation and will help safeguard the long-term reputation of the Nobel Prize".
Two Nobel Prizes will instead be awarded in 2019.
It all began during the MeToo movement in November 2017, when Dagens Nyheter, one of Sweden's biggest daily newspapers, revealed serious allegations of sexual assault and harassment by Arnault. Arnault is married to Swedish Academy member and poet Katarina Frostenson.
The Nobel Foundation, which administers the estate of dynamite inventor Alfred Nobel, said the crisis at the Academy had "adversely affected" the Nobel Prize.
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Three members withdrew from the 18-member Academy in protest after it voted not to remove Fronstein.
For the first time since World War II, the prestigious Noble Peace Prize will not hold. "Confidence in the academy has been undermined, the number of active members is diminished, and there has been an unplanned change in the post of permanent secretary".
As a result of the scandal, the Academy deliberately left a few of its members and the permanent Secretary Sara Danius.
Last year, 18 women accused Arnault of having committed sexual assaults or harassing them, often on the property of the Swedish Academy.
The news comes at a time where the reputed academy has been embroiled with sexual misconduct allegations, a decrease in numbers of its it board members who have recently resigned and the leaking of previous Nobel prizewinners' names ahead of formal announcements. (Arnault denies the allegations.) Resignations and infighting at the academy has followed.
The allegations and Danius's ousting sparked several all across Sweden. The award has also been postponed on seven occasions, as is being proposed this year.
Because of the global status of the Nobel Prize, the turmoil of the secretive group has piqued interest worldwide, with a wave of people wearing bow blouses in solidarity with Danius (in person and on social media).