How to appropriately reject a job offer after accepting the offer?

I have accepted a job offer in a well known MNC which require me to be relocated to another state. Well my mistake was I didn't allow myself some time to think before accepting the job offer. Now after a deep thinking I don't think I can afford to leave my family here and move to another state. The company had issued the offer letter. All I have to do now is just pick up the offer package and do a medical checkup and I'll be starting working in a week time. So what is the appropriate way to reject the offer? By email or phone? Should I inform the manager of my department or the manager in the human resource department that handled my offer letter?