AQE has cancelled next month's transfer test.
AQE's decision to schedule a test on February 27 for pupils transferring from primary to secondary schools had created a political controversy, with critics claiming it would not be safe in the current health situation.
AQE has announced the test will not now take place.
"Due to the ongoing uncertainty about the potential for an extended period of lockdown, the board of AQE Limited has decided to recommend to our grammar schools, the membership of AQE, that there should be no assessment offered by AQE in this academic year," a statement said.
"The test scheduled for Saturday 27th February will therefore not take place.
"The health and safety of the children due to sit the exams is our top priority.
"As we cannot guarantee that the Executive will not extend the lockdown period at this stage, we do not want to cause any distress to the children and their parents by extending this period of uncertainty. We know these are anxious times for many.
"We will be writing to parents individually over the coming days to confirm these arrangements. We hope this will end the period of uncertainty for the children who have been working so hard for these assessments. We wish to thank the Minister for Education, his officials and the Education Authority for their support."
Read more:Up to health chiefs to call for scrapping of school transfer test – Peter Weir
Education Minister Peter Weir said he was disappointed the transfer test had been cancelled for this year.
He said transfer tests have never been compulsory for any school nor any student, but what they have provided for many has been parental choice and opportunity for children to gain a place at a post primary school of their choosing.
"Today's announcement diminishes that choice significantly," he said.
Contingency criteria should be finalised soon by schools and will be published by Northern Ireland's Education Authority on February 2.
Mr Weir added: "Schools still have the opportunity to use either non-academically selective criteria or alternative data as a proxy for academic selection, but neither route is without its difficulties, and our previous guidance that they seek clear advice before they determine their course of action remains."
The joint chief executive of transfer test organiser AQE, Darrin Barr, apologised to pupils.
He told the BBC's Evening Extra programme: "We are sorry for the distress caused.
"Everyone is working with the uncertainty of Covid as restrictions change very quickly and we have been reacting."
He added: "Of course we do not want to cause uncertainty and that is why we have come out with this announcement today."
He said thousands of children and parents had wanted the test to go ahead.
He said the organisation had been unable to get clarification from the authorities around the restrictions.
"So children can get certainty about the next six weeks and to reduce the anxiety we went ahead and cancelled," he said.
Read more:Up to health chiefs to call for scrapping of school transfer test – Peter Weir
