At least 73 people have been killed after thousands of Al-Masry supporters invaded the pitch to attack fans and players from the opposing team.
"I am very shocked and saddened to learn this evening that a large number of football supporters have died or been injured following a match in Port Said, Egypt," Blatter said in a statement on FIFA's website.
"My thoughts are with the families of those who have lost their lives this evening. This is a black day for football. Such a catastrophic situation is unimaginable and should not happen."
Egyptian FA president Samir Zaher has announced that the league has been postponed indefinitely as a result of the incident.
Meanwhile, the Confederation of African Football (CAF) has 'expressed shock' at the events in Egypt, with president Issa Hayatou sending a message of condolence to the Egyptian FA.
"African football is in a state of mourning," he said.
A minute's silence will be held during the quarterfinal matches of the 2012 African Cup of Nations at the weekend.