Dykstra had been promoting the Sept. 28 event for weeks -- he's been training, trash-talking ... he even shoved Morgan during a face-off earlier this month.

But now, it's all over ... Lenny went on Howard Stern Monday morning to make the announcement himself -- "Unfortunately, the fight will not happen."

Lenny's attorney, John Pierce, issued a statement explaining Dykstra pulled out to focus on preparing for his upcoming trial, stemming from a malpractice suit.

As we previously reported, Lenny filed a $15 million lawsuit against L.A. County and several deputies claiming he was badly beaten while serving a jail sentence in 2012.

Now, he's suing the Boucher Law Firm -- which represented him in his lawsuit -- and his new attorney believes the boxing match would be too big of a distraction with that legal issue on the horizon.

Dykstra's attorney says ... "The fight will not be rescheduled."

We're told "Bagel Guy" wants a new opponent -- after all, he's been training with UFC stars like Chris Weidman and Al Iaquinta ... and he wants to unleash the fury on someone!

Stay tuned ...