Previous Mayors Michael Bloomberg and Rudy Giuliani (R) both marched in the parade while they were in office.
Gay participants can march in the parade, but they are not allowed to identify their sexual orientation.
"I believe that uniformed city workers have a right to participate if they choose to. And I respect that right," he said.
President of the Catholic League Bill Donohue, who will lead the group's parade delegation, was pleased to hear that de Blasio would be skipping the event.
"Personally, I am delighted," he wrote in a statement on the Catholic League website. "I do not want to march with a public official who does not want to be associated with Irish Catholics."
Donohue added that signs indicating sexual orientation were not the only signs prohibited in the parade.
"De Blasio says he will not march because the parade does not allow pro-gay signs. Neither does it allow pro-life ones," he said. "The great myth has always been that the parade is anti-gay: in previous years, I have gone on the radio inviting gays to march with the Catholic League, provided they do not draw attention to themselves or to some extrinsic cause. The parade is not about homosexuals, or abortion, or anything other than honoring St. Patrick."