Kiir said he needs 15 days before he will sign the agreement with rebel leader Riek Machar, according to mediators in the Ethiopian capital of Addis Ababa. Machar signed the accord before Kiir refused.
Some South Sudanese women who participated in the negotiations were seen crying after Kiir said he would not sign. Others banged tables to express their disappointment.
Mediators had expressed hope that Kiir and Machar would sign a "compromise document," including provisions on how to share power and the composition of a coalition government.
South Sudan has been at war since December 2013 as government troops try to put down a rebellion. Multiple attempts to sign a comprehensive peace agreement have failed despite international pressure.
Machar told reporters he was surprised by Kiir's decision.
"I didn't know that he was not going to sign," he said. "I couldn't find any explanation for this because he had it all. There is no reason why he requested for more time. We had a good agreement, he had a lion's share on many areas."
The international community had hoped South Sudan's rival factions would finally reach a political settlement after months of on-off negotiations under the mediation of a regional bloc known as IGAD.
The U.S. urged the warring factions to reach a peace agreement by Aug. 17 or face sanctions.
Donald Booth, U.S. special envoy to Sudan and South Sudan, described Kiir's decision as "unexpected," saying he hopes the president will sign the agreement soon.
"But, as President Obama said, things will fundamentally change if there is no agreement," he said.
In Washington, U.S. State Department spokesman John Kirby warned that Washington would look at ways to "raise the cost of intransigence," though he didn't specify what that might mean in terms of sanctions or other steps against Kiir or the South Sudanese government.