The network gave no reason for its decision.
Armstrong, the seven-time Tour de France winner, had initially believed he would win the big three-week race, although he has never competed in the Giro d'Italia in his career. The race around Italy is due to start this weekend in Venice.
The famed biker's plans were altered in March when he crashed in a race in Spain, breaking his collarbone. For several months since his announced return to cycling, Armstrong's goal was to be a major competitor in the overall general classification of the race. Only one other American, Andy Hampsten, has won the prestigious Italian race.
Now, Armstrong has set his sights somewhat lower -- targeting at least a stage victory -- a road race win or a victory in one of the two individual time trials. In addition, he has said another U.S. cyclist and Armstrong's Astana teammate, Levi Leipheimer, is a stronger rider at the moment, and that he would support him in going for the overall win.
Leipheimer just won the Tour of the Gila in New Mexico this past weekend, where Armstrong and other Astana teammate, Chris Horner, were competing. Armstrong came in second place.
One media executive believes Versus may have thought the rights fees were too high to take on the Giro. Also, Armstrong is already committed to riding in the legendary Tour de France race, which starts in July, and which Versus has aired live for the last several years.
Sports programming executives note that the Tour de France race is better known among casual cycling fans -- those more inclined to follow Lance Armstrong. Armstrong retired from cycling after winning his seventh Tour de France in July 2005.
Versus expects higher viewership for this year's event and intends to highlight Armstrong's return in various marketing efforts.
Already this year, Versus has aired two weeklong stage races that included Armstrong: the Tour Down Under in Australia and the Amgen Tour of California in the U.S. Versus has televised parts of the Giro d'Itala in the past.