Minister of State for Energy Affairs, Saad al-Kaabi, told a news conference that Qatar would still attend the group's meeting on Thursday and Friday this week.
The decision to withdraw was because of Qatar's plans to increase production, the minister said.
He said Qatar Petroleum planned to raise its production capability from 4.8 million barrels oil equivalent per day to 6.5 million barrels in the next decade.
Qatar's decision to quit OPEC shows the frustration of small producers at the dominant role of a Saudi and Russia-led panel, Iran's OPEC governor Hossein Kazempour Ardebili told Reuters, adding that any supply cuts should come only from countries that had increased output.
Twitter handles were abuzz with the news break."It is better if OPEC breaks, free market may stablise oil prices", read a tweet. Although Russia and Saudi Arabia have yet to confirm any fresh cuts, their agreement opened the door for a deal when OPEC meets this week in Vienna.
In June 2017, Saudi Arabia, OPEC's largest exporter, along with Bahrain, Egypt and the United Arab Emirates, cut ties with Qatar and launched an economic boycott that included preventing Qatar Airways from using its airspace, closing its land border and blocking its ships from their ports.
CNBC reports that the announcement is coming days before a crucial meeting between the influential energy-rich country and its allies.
At the meeting, the producer group, along with non-OPEC member Russian Federation, is expected to announce cuts aimed at reining in a production overhang that has pulled down crude prices by around a third since October.
Although contributing only a fraction of OPEC's overall production, Qatar's decision also throws into question the viability of the cartel.
Saudi Arabia's production topped more than 11 million barrels daily last month.
Brent for February settlement rose 2.8 per cent to US$61.11 on London's ICE Futures Europe exchange, and was at an US$8.44 premium to WTI for the same month.
Saudi Arabia, the UAE, Egypt and Bahrain started boycotting Qatar past year, accusing Doha of funding militants across the Middle East and fostering ties with Iran, charges that Qatar denies.
The low oil price benefits consumers in the USA as well as countries such as Turkey and Pakistan, which depend on imports to meet their energy needs.
There's also been a shift in the way energy exports are shared from Qatar. The country reportedly produces 600,000 barrels of oil a day compared to more than 27 million from all the members of the cartel.