The International Committee of the Red Cross has decided not to reopen its office in Baghdad.
The office was closed following a suicide bomb attack in October in which two Red Cross workers were killed.
It will remain closed for the time being and the agency has also decided to close its office in Basra temporarily. But the agency will continue to operate in the north of Iraq.
The ICRC has decided against any militarisation of its presence in Iraq.
Spokesman Florian Westphal said: "We clearly decided against seeking any military protection for buildings or staff."
The ICRC still has 30 foreign staff and 600 Iraqis working in the country, and is still deciding whether to keep its foreign staff over there.
"The situation is extremely dangerous and volatile," added Westphal.
Since July, the Red Cross has pulled around 100 international staff out of the country.