"The foundation stone laying ceremony, scheduled to be held tomorrow morning, has been called off," Deputy Registrar of the institute Rajesh Sahay said without assigning any reason.
Both leaders had earlier given consent regarding their participation for the event, but later, in separate communications to the institute, they expressed inability to do so citing urgent commitments, sources said.
Sibal was to deliver speech as the Chief Guest and Modi had to give the Presidential address.
"The event has been postponed and new date for the ceremony will be announced later," they added.
Recently, the two leaders were involved in a public spat on the issue of providing low-cost 'Aakash' tablets to students under a HRD Ministry project.
Modi had ridiculed the Centre's "tall" promise of providing cheap PCs to students.
Criticising the poll promise of Gujarat Congress to give free laptops if voted to power, Modi had said, "Kaash (if only), this Aakash tablet could land on earth the lies (promise of free laptops by state Congress) they (Congress) are spreading now, would hold some weight."
"No Aakash tablets have come down on earth even after 11 months (of promise by the Centre). Now I realise why the gizmo was named Aakash," the BJP leader had said earlier this month, punning on the word "Aakash" (sky).
Sibal, reacting to Modi's jibes, had said he himself would present the version-2 of Aakash to Modi at a public event on Sept 22.
"Modi may be rich in politics but he is poor at heart," the Congress leader had said.