It is the second major firm to withdraw from the Mobile World Congress in Barcelona, as South Korea's LG has already said it would skip the biggest annual event for the mobile phone industry.
Several Chinese groups, such as ZTE and Huawei, have said they would take precautionary measures and limit their presence at the event.
The new coronavirus that appeared in late December has claimed more than 630 lives and infected at least 31,000 people in mainland China, with more than 240 cases spreading to two dozen countries.
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“Due to the outbreak of the novel coronavirus Ericsson has taken the decision to withdraw from the industry event GSMA Mobile World Congress Barcelona 2020 as the health and safety of employees and customers cannot be ensured,” it said in a statement.
“Ericsson's responsibility for the health and safety of employees, customers and other stakeholders is the company's top priority,” it added.
The Mobile World Congress, held every February in the Spanish city of Barcelona, is a major event for both manufacturers of telecommunications network equipment and handset makers.
Companies often build elaborate stands to show off their wares and thousands attend the event that is a key gathering for executives to discuss industry developments.