The bill "does not address a specific or present concern related to religious liberty in Arizona," she said in explaining her decision. She took no questions after announcing the veto.
"I sincerely believe that (the bill) has the potential to create more problems than it purports to solve," she said. "It could divide Arizona in ways that no one could imagine."
Brewer added that the legislation was "broadly worded and could result in unintended and negative consequences."
The bill had drawn an intense national focus on the state since it cleared the Arizona House last week and went to Brewer. Gay rights advocates had said the bill, which would require the government to have a compelling interest before infringing on an individual's exercise of their religion, would effectively legitimize discrimination against LGBT people.
And, as the backlash intensified, even more conservative constituencies pressured Brewer to reject the bill. Arizona business groups sent her letters, Republican U.S. Sens. John McCain and Jeff Flake expressed their opposition and even GOP lawmakers who voted for the bill pushed her to reject it.
Only a select few hard-line conservatives, like Rep. Michele Bachmann (R-MN) and the Heritage Foundation, remained steadfast in their support.
Brewer stressed that she had consulted with all sides before making her decision.
"I call them like I see them, despot the cheers and the jeers from the crowd," she said. "Religious freedom is an American value, and so is non-discrimination."
Democrats in the Arizona legislature and civil rights groups praised Brewer's decision.
“We want the nation and the world to know that (the bill), a mean-spirited effort to legally sanction discrimination, is not representative of our state," Senate Democratic Leader Anna Tovar said in a statement. “It's time to move Arizona forward and make sure something like SB1062 never happens again. It's time to show the nation and the world what Arizona is really about.”
“Discrimination has no place in Arizona, or anywhere else,” said Alessandra Soler, executive director of the ACLU of Arizona, in a statement. “We’re grateful that the governor has stopped this disgraceful law from taking effect, and that Arizona will remain open for business to everyone.”
McCain also applauded the official veto.
"I appreciate the decision made by Governor Brewer to veto this legislation," he said in a statement. "I hope that we can now move on from this controversy and assure the American people that everyone is welcome to live, work and enjoy our beautiful State of Arizona."
Meanwhile, the Center for Arizona Policy, a conservative group that helped craft the bill, lamented Brewer's decision.
"Opponents were desperate to distort this bill rather than debate the merits. Essentially, they succeeded in getting a veto of a bill that does not even exist," the group's president Cathi Herrod said in a statement. "When the force of government compels one to speak or act contrary to their conscience, the government injures not only the dignity of the afflicted, but the dignity of our society as a whole."
The Madison Group, a national grassroots conservative organization, tweeted that Brewer "owes her residents an alternative solution to protecting religious liberty from the courts."
The outcry over Arizona's legislation has also led to closer scrutiny of similar bills in other states. Ohio lawmakers scrapped their version after pressure from gay rights groups, and a top Georgia business group told TPM that they would oppose the bill being advanced in that state.