The 32-year-old won his 11th French Open title on Sunday, defeating Dominic Thiem in straight sets in the final at Roland Garros.
But the current world number one will miss the Fever-Tree Championships, that starts on Monday, following a very long clay court season.
He said: Queens is a great event, I have happy memories of winning the title in 2008 and I wanted to come back this year.
But it has been a very long clay court season for me with great results.
I would like to say sorry to the tournament organisers and most of all to the fans that were hoping to see me play, but I have spoken to my doctors and I need to listen to what my body is telling me.
Nadal, who completed a Roland Garros-Queens-Wimbledon treble in 2008, had originally intended to play in the tournament in preparation for Wimbledon 2018.
But he played 27 matches on clay in the space of just two months and has decided time spent on the sidelines would be more beneficial.
Tournament Director, Stephen Farrow, said: We are obviously disappointed that Rafa has decided that he is unable to play this year, but we wish him well and hope to see him on our courts in the future.
At the same time, we are thrilled to have added Novak Djokovic to a line-up that already includes so many of the best players in the world.
We remain on track for a fantastic week of tennis at the Fever-Tree Championships and we cant wait to get started.
Djokovic took a Fever-Tree Championships wild card on Monday, agreeing to play in the tournament for the first time since 2010.
Andy Murray still hopes to feature, while Juan Martin del Potro, Stan Wawrinka, Marin Cilic, Grigor Dimitrov, Nick Kyrgios and Denis Shapovalov are all set to battle it out at Queens.