Last month, the college booked the British designer, once one of the most revered talents in the fashion world, to teach a workshop called "Show Me Emotion." His hiring drew complaints from some students who said the school should not employ someone who had been convicted of a hate crime.
The school announced on Tuesday that the class had been canceled.
"An important element of the planned workshop with John Galliano was a candid conversation about the connection between his professional work and his actions in the world at large," the school said in a statement.
"Unfortunately, we could not reach consensus with Mr. Galliano on the conditions of this conversation, and the program could not move forward," the school said.
A spokeswoman for Parsons would not comment further on the disagreement or whether the complaints, including an online petition with over 2,000 signatories against Galliano's visit, had affected the decision.
Liz Rosenberg, Galliano's publicist, said in an email on Wednesday, "John will not be commenting nor will I on his behalf. So sorry."
In 2011, a French court convicted Galliano for making "public insults based on origin, religious affiliation, race or ethnicity" after two episodes at a café near his Paris home in which he used anti-Semitic slurs while arguing with other customers. The court gave him a suspended fine of €6,000 ($8,000), which he will have to pay only if he is convicted of a similar offense.
Before his trial, a British newspaper published a video of a third episode in which Galliano could be seen taunting people at a nearby table, saying, "I love Hitler, and people like you would be dead," and calling them ugly. Shortly thereafter, Dior fired him from his position as creative director, and he was shunned by many prominent people in the fashion world.
Galliano apologized to the court for his behavior and said he had since sought treatment for alcohol and sedatives to which he said he was addicted and which he partly blamed for the outbursts.
Since his downfall, Galliano designed a wedding dress for the model Kate Moss, and, earlier this year, spent several weeks working at Oscar de la Renta's studio in New York, preparing for de la Renta's New York Fashion Week show in February.
Before cancelling the class, Parsons said it believed Galliano, 52, "has demonstrated a serious intent to make amends for his past actions."