The retailer cited high rental costs and supply chain challenges in Africa's most populous country.
"The Nigerian business was unable to sustain a compelling product and value proposition which represents the brand well, and meets the needs of the Nigerian customer," the company said in a statement.
Woolworths runs three stores selling clothes and general merchandise in the West African country, where it opened its first store in late 2011.
The Cape Town-based company said "the investment was deemed no longer viable" after several attempts to improve the performance of its stores.
Woolworths said it remained committed to the rest of its business in Africa, where it runs 59 stores in nearly a dozen countries.
Shares of Woolworths ended flat at 74.04 rand on Wednesday.