The world No. 2 said he was keen to play the warm-up event for the Australian Open in two weeks but was forced to reconsider on medical advice.
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"I did an MRI and it shows a small staring on my left thigh," Nadal, who was due to face Frenchman Jo-Wilfried Tsonga in the second round on Thursday, said.
"I tried to play, I wanted to play, but recommendations from the doctors (were otherwise).
"It's a small thing that can become a much bigger... when you compete the intensity on the muscle it can get worse. I feel better than I did four days ago... It's a risk to damage my body for one month if I play here."

Rafael Nadal of SPain during a practise session

Image credit: Getty Images

Nadal has not played on the tour since the US Open in September. He retired from his Flushing Meadows semi-final against Juan Martin Del Potro due to a knee injury and also had ankle surgery in November.
Wednesday's news obviously creates concern that Nadal will be missing for the first Grand Slam of the season when it starts in Melbourne on January 14.
Despite a curtailed season, Nadal managed to win five titles last year, including a record-extending 11th French Open title that took his Grand Slam tally to 17.
He lost a three-set exhibition match against South Africa's Kevin Anderson in Abu Dhabi last week and had indicated he was fighting fit ahead of the Brisbane tournament.
Lucky loser Taro Daniel will replace Nadal in the second round against Tsonga.
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