The Spaniard, who has said he expects to retire after the 2024 season, returned to competition in Brisbane in January, after almost a year sidelined with a hip flexor injury, but has not played an ATP event since.
The Spaniard skipped the Indian Wells Masters last month saying he was not "ready to play at the highest level" but was expected to return for the claycourt swing in the build-up to the French Open, which he has won a record 14 times.
"These are very difficult moments for me, sporting wise. Unfortunately I have to tell you that I am not going to be playing in Monte Carlo. My body simply won't allow me," Nadal said in a statement on social media.
"And even if I am working hard and making the maximum effort every day with all the will to play and compete again at tournaments that have been very important for me, the truth is that I can't play today.
"You have no idea how hard this is for me to not be able to play these events."
The Monte Carlo Masters begins on Sunday. Nadal has won the event a record 11 times, with his last victory coming in 2018.
The French Open main draw begins on May 26. Nadal, who last won the Roland Garros title in 2022, has not competed at a Grand Slam since a second-round exit at the 2023 Australian Open.
