The Spaniard, ranked third in the world, cited "personal reasons" in a statement from the Paris tournament.
Nadal is playing in Basel this week despite suffering with appendicitis, and takes on Borna Coric on Friday.
He had planned to decide after the tournament whether to undergo surgery or complete the season in London.
Nadal is expected to address the speculation over his participation in the World Tour Finals after his match with Coric.
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