Jury selection had been scheduled to start on Tuesday.
Late on Friday, an appellate judge in Rochester halted proceedings until the court ruled on a motion by Hadi Matar's lawyer for a change of venue out of Chautauqua County, where the attack occurred.
The court could rule on the motion as early as Tuesday but the trial has been taken off the calendar until further notice, District Attorney Jason Schmidt said.
"It presents another layer of difficulties and challenges for us," he said. "I'm disappointed."
Matar's lawyer, Nathaniel Barone, did not immediately respond to a request for comment.
Matar has been held without bail since rushing the stage as Rushdie prepared to speak at the Chautauqua Institution and stabbing him more than a dozen times before being subdued by onlookers.
The Satanic Verses author was left blinded in one eye. The event's moderator, Henry Reese, was also wounded.
Matar has pleaded not guilty to attempted murder and assault.
In a separate indictment, authorities allege that Matar was motivated by a terrorist organisation's endorsement of a fatwa, or edict, calling for Rushdie's death.Â
A separate trial on the federal charges - terrorism transcending national boundaries, providing material support to terrorists and attempting to provide material support to a terrorist organisation - will be scheduled in US District Court in Buffalo.
