The decision comes after an UN-backed panel said it had clear evidence of fraud in at least 210 polling stations during the first round of polling in August.
Initial results suggested Mr Karzai had received 55 per cent of the vote, and ex-Foreign Minister Abdullah 28 per cent.
With ballots from these stations discounted, Karzai’s vote drops by almost a million, to 48 per cent of the vote, not enough for an outright win.
The incumbent president said this time he hoped turnout would improve. In the first round, it had fallen to 50 per cent, down from 70 per cent in 2004. The drop was attributed to the lack of security in the country and the Taliban threat.