Christophe de Margerie's comments virtually cripple Tehran's hopes of boosting its gas exports because Total is the last major western energy group considering a big investment.
"Today we would be taking too much political risk to invest in Iran because people will say: 'Total will do anything for money,'" de Margerie told the Financial Times newspaper.
Total was to develop phase 11 of Iran's giant South Pars gas field to produce liquefied natural gas (LNG) alongside Malaysia's Petronas. Iran has vast untapped gas reserves and wants to develop the sector for export.
The news came amid escalating tensions between world powers, led by the United States, and Tehran.
On Wednesday, Iran test-fired a Shahab-3 missile which it said is capable of reaching Israel, fuelling fears of a conflict over its disputed nuclear programme and triggering a rise in oil prices.
Total is one of the few companies in the world thought to have the technology to exploit Iran's gas reserves and the news is likely to come as a serious blow to Tehran.
It is now unlikely to be able to boost its gas exports significantly until late next decade at the earliest, the Financial Times said.
Samuel Ciszuk, a Middle East energy analyst at economic analysts Global Insight, told the paper the news was "a death blow" for Iran's ambitions over liquefied natural gas.
The Financial Times described the news as a "victory for US efforts to isolate Tehran" and said Total had been left exposed by Royal Dutch Shell and Repsol YPF's announcement in May that they would pull out of phase 13.
De Margerie also reportedly voiced frustration over tight scrutiny of investments in the Iranian energy sector, saying: "You take the two major countries (Iran and Iraq) out of the system and then you say: 'There is not enough oil and gas.' Oh no, surprise, surprise."
Washington had reportedly been particularly worried about the possible impact of a major Total investment in Iran.
Iran warned in September it was prepared to go ahead with a major gas project using Iranian firms alone if Total did not swiftly implement the deal.
Wednesday's missile test was condemned by the US, although US Defence Secretary Robert Gates played down the risks of a conflict between his country and Iran.
The UN Security Council has imposed several rounds of sanctions on Iran for not suspending its uranium enrichment activities, which world powers fear could be used to make a nuclear weapon.