The 38-year-old was planning to use the event from January 12th as a springboard to the opening Grand Slam at Melbourne Park, where he is targeting an 11th title and elusive 25th major crown.
"To all my fans in Adelaide, unfortunately I'm not quite physically ready to compete in the Adelaide International next week," Djokovic said on Instagram.
"It's personally very disappointing to me, as I have such great memories of winning the title there two years ago. I was really excited about returning as it truly felt like playing at home.
"My focus is now on my preparation for the Australian Open and I look forward to arriving in Melbourne soon and seeing all the tennis fans in Australia."
The world number four has not played a tour match since he defeated Lorenzo Musetti in the Athens final in early November.
Djokovic has had to settle for a secondary role since Jannik Sinner and Carlos Alcaraz took control of the men's tour.
He made the semis at all four majors in 2025 but failed to go further, with his last Grand Slam title coming at the US Open in 2023.
His Adelaide withdrawal came a day after he announced he would cut ties with the Professional Tennis Players Association, a group he co-founded.
Djokovic cited "concerns regarding transparency, governance, and the way my voice and image have been represented".