Next week's edition of the tournament where Roger Federer retired in 2022 after teaming up with Nadal in doubles would have been the Spaniard's first event since the Paris Olympics and potentially one of his last ever.
"I'm really disappointed to share that I won't be able to compete at the Laver Cup in Berlin next week," the 38-year-old Nadal said.
"This is a team competition and to really support Team Europe, I need to do what's best for them and at this moment there are other players who can help the team deliver the win."
The 22-time grand slam champion didn't address his current fitness after a spate of injuries in recent years, or when he might play again.
Nadal withdrew last month from the US Open, meaning he missed three of the four grand slams in 2024.
He last played in reaching the men's doubles quarter-finals at the Olympics, where he also lost in the second round of singles to Novak Djokovic.
The Laver Cup, to be held from September 20-22, is an indoor hard-court men's competition pitting a team of European stars against an outfit featuring top players from the rest of the world.
No replacement for Nadal has yet been announced.
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