The Wimbledon champion underwent back surgery last month, and has now confirmed that he will not be sufficiently recovered in time to play in the season-ending tournament at the O2 in November.
"I'm really disappointed not to be playing this year, I love playing in front of my home crowd, it's a great atmosphere,” said Murray.
“All the players look forward to competing in London and I'll be doing my best to qualify again for the tournament next year."
The world number three has been a semi-finalist in the eight-man tournament three times in the last five years, and had already qualified for this year's even alongside Rafael Nadal, Novak Djokovic and David Ferrer.
Juan Martin del Potro, Tomas Berdych, Roger Federer, Stanislas Wawrinka and Richard Gasquet currently sit in the five available spots in the Race to London standings.
Tournament director Andre Silva said: "It’s unfortunate that Andy will be unable to play in this year’s tournament. He’s had a historic year on the Tour and of course he’ll be missed. We wish him all the best as he continues his recovery from surgery, and we hope to see him back stronger than ever for the 2014 season.”