The Olympic tennis tournament from August 15-22 ends a week before the U.S. Open starts on August 30.
"The big thing is when we had the Sydney Olympics in 2000, it was after all the four majors had been played," Australian Hewitt told Melbourne's Herald Sun newspaper.
"Athens is being held right before the U.S. Open and it's got the same feeling as the Atlanta Olympics (in 1996) when a lot of guys were missing because it was just so close before the U.S. Open.
"I've sat down with (coach) Roger (Rasheed) and we've come up with a schedule designed for me to do well at the Grand Slams and Davis Cup.
"They're my priorities next year. I would like to win at least one major and help Australia successfully defend the Davis Cup."
AOC STATEMENT
Australian Olympic Committee (AOC) media director Mike Tancred released a statement on Thursday confirming Hewitt's withdrawal.
"The Australian Olympic Committee is disappointed because Lleyton is such a great competitor for his country," Tancred said.
"We admire the spirit and tenacity he displays when he wears the green and gold, especially in the Davis Cup for Australia.
"We respect his decision and hope that he might re-consider but the AOC can't compel athletes to compete at the Olympics, it is entirely their choice."
Former U.S. Open and Wimbledon winner Hewitt, 22, said for many track and field competitors the Olympics were the ultimate prize.
But he added: "For a tennis player, you can pack up your bags after losing at the Olympics and be on cloud nine two weeks later if you've had a win in New York."
Hewitt said his decision had nothing to do with his Belgian girlfriend Kim Clijsters's plan to miss the Games, the newspaper reported.
The women's world number two said earlier this month she would miss the Olympics due to a clash of clothing sponsors.
Hewitt helped Australia to win the Davis Cup final against Spain in Melbourne last month after a disappointing year in which he slipped from number one to 17 in the rankings.
