In a statement, the Australian prime minister said she had decided it would be inappropriate for her to appear at the conference in light of the comments.
ACL director Jim Wallace sparked outrage when he made the comment at a debate on marriage equality with the Greens leader Christine Milne.
After saying that the lifespan of a gay male is half that of a smoker, he added: “The life of smokers is reduced by something like seven to 10 years and yet we tell all our kids at school they shouldn’t smoke.
“We need to be aware that the homosexual lifestyle carries these problems.”
Gillard said of her decision to cancel the speech: “I believe yesterday’s comments by Jim Wallace were offensive. To compare the health effects of smoking cigarettes with the many struggles gay and lesbian Australians endure in contemporary society is heartless and wrong.”
She added: “Although everyone is entitled to their own view, these statements reiterated again today on behalf of ACL are totally unacceptable.”
Wallace told The Australian that Gillard had misunderstood his comments at the debate.
“I did not say that smoking was healthier than gay marriage,” he told The Australian.
“My point is, that we are about to wrap the homosexual lifestyle up with hetrosexual lifestyle as equal love.
“But they are hardly equal when the consequences of a homosexual lifestyle carry such dramatically different health consequences. Tell me what is wrong with that?”