Wheldon was flown by helicopter to University Medical Center in Las Vegas for treatment before his death was announced two hours later.
"IndyCar is very sad to announce that Dan Wheldon has passed away from unsurvivable injuries," IndyCar Series CEO Randy Bernard said in a statement.
"Our thoughts and prayers are with his family today. IndyCar, its drivers and owners have decided to end the race. In honor of Dan Wheldon, the drivers have decided to do a five-lap salute," Bernard added.
Wheldon was the 2005 Indy Racing League IndyCar Series champion and he won the Indy500 race that year and also in 2011.
The drivers returned to the track on Sunday for an emotional five-lap tribute with Wheldon's fellow British driver, Scotsman Dario Franchitti, sobbing uncontrollably as he was strapped back into hi s car.
SILENT FANS
Crews lined up along the pit lane and fans in the stands stood silently as the drivers paid tribute to the popular Wheldon.
The cancelling of the race meant that Franchitti won his third straight series title.
After winning eight British national titles in karting and then finishing third in the 1998 Formula Ford championship in Britain, Wheldon moved to the U.S. in pursuit of better opportunities.
He clinched the F2000 Championship Series in 1999 with six victories and then moved into IndyCar where he won rookie of the year honours in 2003.
Wheldon claimed the 2005 series thanks to six wins for Andretti Green Racing.
The Englishman later raced for Panther Racing and his final team Bryan Herta Autos port.
Wheldon leaves his wife Susie and their two young sons.
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