The Argentine was seeded number one for the hardcourt championship in Adelaide but pulled out because of a chronic wrist problem that has plagued him for three months.
The world number eight told tournament organisers he was planning to fly to Spain to see his physiotherapist in the hope of making it back for the Australian Open, starting in Melbourne on January 19.
Nalbandian's withdrawal paved the way for South African Wayne Ferreira to take over the top seeding in Adelaide with American Vince Spadea promoted to second.
The tournament starts on Monday.
