Labour lawmaker David Lammy, who had vowed to lead a protest against Trump if he visited, said the USA president was "too scared of us Londoners, who don't want him darkening our door".
Bemused construction workers and passers-by took selfies with the Trump waxwork, which was first unveiled at Madame Tussauds in January a year ago.
London's Madame Tussauds moved its wax figure of President TrumpDonald John TrumpHouse Democrat slams Donald Trump Jr. for "serious case of amnesia" after testimony Skier Lindsey Vonn: I don't want to represent Trump at Olympics Poll: 4 in 10 Republicans think senior Trump advisers had improper dealings with Russia MORE to the new US embassy in the city after the president canceled his visit to open the building next month.
Trump's critics believed he had pulled out of the trip over fears of mass protests over his impending state visit to the country, which is set to go ahead though no date has been confirmed by Downing Street.
"Bad deal. Wanted me to cut ribbon-NO!" the USA president added.
"It seems he's finally got the message".
Khan noted Trump's cancellation "reinforces what a mistake it was for Theresa May to rush and extend an invitation of a state visit in the first place".
"We were only at the embassy for about 25 minutes, but there were some immediate reactions", she said.
Many British politicians have voiced their opposition to Trump being granted a state visit, and say the invite should be recalled.
"It appears that President Trump got the message from the many Londoners who love and admire America and Americans but find his policies and actions the poor opposite of our city's values of inclusion, diversity and tolerance", Khan said.
The American flag was this month removed from Grosvenor Square where the U.S. embassy has been based since 1938 with the area known as "Little America" during World War Two, when the square also housed the military headquarters of General Dwight D. Eisenhower. In 2009, it was given "listed" status which limits changes that can be made to the building's exterior because of its historical significance.
Woody Johnson, Trump's appointed U.S. ambassador to Britain, told reporters last month that moving to the new site at Nine Elms reflected "the global outlook of the United States going forward in the 21st century: rather looking out, than looking in".
A model of US President Donald Trump from the Madame Tussaud's waxwork attraction more than four miles away was placed outside the new embassy building, due to open for business on January 16, after the president's announcement.
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