She requested that Tennessee state legislature remove a bill for a statue of her on the grounds of Nashville’s State Capitol government building.
The 9 to 5 singer tweeted to say that now was not the right time.
“Given all that is going on in the world, I don’t think putting me on a pedestal is appropriate at this time,” she said.
The 75-year-old added she was “honored and humbled” by the gesture, saying:
“I hope, though, that somewhere down the road several years from now or perhaps after I’m gone if you feel I deserve it, then I’m certain I will stand proud in our great State Capitol as a grateful Tennessean.”
In November, the star said she felt “very honored and proud” to have given money to research into one of the most promising Covid-19 vaccines.
She previously announced she was giving $1m (£750,000) to Vanderbilt University Medical Center in Nashville. That was one of the trial sites for the Moderna vaccine, which early research showed was nearly 95% effective.
Earlier this month, the singer-songwriter also revealed she turned down the Presidential Medal of Freedom from the Trump administration twice.
She did not accept the awards because her husband was ill and she would not travel due to the pandemic.
Parton, who has generally steered clear of making political comments throughout her long career, last year came out in support of Black Lives Matter.
She told Billboard Magazine: “Do we think our little white asses are the only ones that matter? No!”
“I understand people having to make themselves known and felt and seen,” she told the music magazine.
As well as penning mega hits, like I Will Always Love You and Jolene, Parton has a history of philanthropy that stretches back several decades.
She has supported child literary initiatives through her Dollywood Foundation and has also given to and raised money for wildlife and HIV/Aids charities.