At least 29 people were killed as a blaze ripped through an eight-floor building in the central city of Jecheon yesterday.
The Olympic torch relay, which was due to pass through Jecheon this afternoon, was called off by organisers.
South Korea‘s Pyeongchang region is due to hold the Winter Games in February.
Torch relay manager Ryu Hoyon said: “We thought that having a torch relay at a place where so many people died in a fire accident is just not right.
“We therefore cancelled today’s event in Jecheon. We are planning to adjust further schedules with those who want to continue the relay.”
The death toll from the inferno, which took place at a sports centre, could rise as rescuers continue to search the building.
Local media said some of the victims’ bodies were unrecognisable.
Many of the casualties had been using a public bath on the second and third floors, which made it harder for them to escape.
A spokesman for the national fire agency said: “The fire produced so much toxic smoke so quickly, leaving many people unable to evacuate.”
South Korean President Moon Jae-in visited the site of the tragedy and promised to commission a full investigation.
Consoling victims, he said: “The government as a whole will thoroughly probe this accident’s cause and process of response.
“Although after the fact, the investigation and measures will be such that, at least, there will not be lingering deep sorrow.”
Anger mounted today at reports of shoddy construction and broken doors that may have contributed to the deaths.
Jecheon’s mayor told reporters the city was considering a mass funeral and planned to cover most of the costs.
The incident is the worst fire in South Korea since 2008, when a blaze at a warehouse in the city of Icheon killed 40 workers.
Jecheon is about 105 miles south-east of South Korea’s capital, Seoul.