Steve Cotterill's side had been due to face the Qatar Stars League outfit as part of their upcoming pre-season training camp in Spain.
However, the Proud Salopians group called for the game to be cancelled due to the Middle East nation's views on the LGBTQ+ community, women's rights and overall human rights.
Town, in response, originally stated whoever was captain for the game would wear the Rainbow Laces armband 'to show solidarity with our LGBTQ+ community'.
The club, though, have now opted to cancel the fixture on July 6 and put on an open training session for supporters in Spain instead.
Town's latest club statement read: "Shrewsbury Town FC can confirm that our game against Qatar SC at Hotel Meliá Villiatana in Benidorm that was scheduled for Wednesday 6th July has been cancelled.
"The fixture was arranged late in the off-season as an alternative to the previously expected Coventry City fixture – a game that fell through due to the locations of the two clubs' training camps and a venue suitable to both teams could not be agreed upon.
"Following the cancellation of the game against Qatar, Shrewsbury Town manager, Steve Cotterill, has announced that he will ensure the travelling fans are provided with an alternative and has organised an open training session for them to attend on Wednesday 6th July at 10am at the Oliva Nova Beach and Golf Resort in Valencia, Spain – where the squad is based for the week.
"The manager has also promised that the fans who have made the journey to the Spanish coast will be able to meet the players, new signings, and himself after the training session that will take place on the Wednesday morning.
"Due to this training session taking place in Valencia and not Benidorm, the manager has also confirmed that fans will be provided with a free coach journey over to the Oliva Nova Resort. This coach will leave from a pre-arranged spot in Benidorm at 9am – where the club expects most fans to be staying – and take fans directly to the Olivia Nova Resort.
"To book your place on the free coach, contact firstname.lastname@example.org or contact the club on 01743 289177."