Presidential spokesman, George Charamba, told state media that had Mugabe been given the position he would have rejected it.
He said the WHO is against tobacco growing and selling and that this is a key foreign currency earner for Zimbabwe.
Representing the UN agency as an ambassador would have been contradictory and injured the national interest, he said.
Many in Zimbabwe’s vibrant social media community weren’t convinced by the spokesman’s version of events.
After all, state media had reported on the appointment last week, hailing it as another feather in Mugabe’s cap.
Zimbabwe’s public health system is in a difficult situation with shortages of drugs, outbreaks of disease like typhoid and poorly equipped hospitals.
Workers at the WHO offices in Harare have had to paint over some graffiti that appeared this weekend.
It read “Thanks WHO. Don’t do it again. We’re watching”.