You could just leave update there.
Until you actually proceed with the install, it is not installed.
You ARE NOT forced into actually installing any upgrade/update!
It does take up space on your iDevice, but it is NOT ever installed.
For future reference there is a way to temporarily remove an iOS upgrade/update so it can't ever be downloaded at all!
Go into the Settings App, General Settings panel.
In the right hand column, tap Storage and iCloud Usage.
At the top in the first block of 3 panels where it is titled at the top of this block Storage, tap the panel that says Manage Storage.
A list of every app will generate itself.
Once this list stops generating, look through this list until you see something like iOS 10.x.x in this list.
Tap on the arrow at the far right on that iOS 10.x.x panel.
It will bring you to another screen that will allowing you to completely delete/remove the entire iOS upgrade/update.
This removal/deletion of an iOS upgrade/update is not permanent and may return at anytime when the iOS upgrade/update at some point will get re-pushed to your iDevice, where you can simply perform this procedure, again, to delete the iOS upgrades/updates.
For the most part, iOS upgrades/updates typically, wii not reappear for several days up to a week to two week intervals.
