She later gave birth to daughter Olympia in September, and then Wednesday Alexis Ohanian and in November.
The former world number one, who won the last of his 12 grand slam honors when he captured his maiden French Open title in 2016, has not played since retiring against Czech Tomas Berdych with the injury in the Wimbledon quarter-finals in July.
She has played just once in public since, losing to French Open champion Jelena Ostapenko in Abu Dhabi last week, but was still hopeful of making a remarkable return at the Australian Open until she admitted defeat a week ahead of the event.
The season's first major starts on January 15 at Melbourne Park and seven-time Australian Open champion Williams will be missing it for the first time since 2011.
In a statement put out by Australian Open organizers, Williams said: "After competing in Abu Dhabi I realized that although I am super close, I'm not where I personally want to be". She remained hopeful of making a return to Australia and defend her title but admitted that it's a tough task and therefore, made a decision to walk out.
Williams didn't drop a set while winning last year's title, and her victory helped her regain the world No.1 ranking.More news: Hutch's Grimsley to play in FCS title game Saturday
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It is the first time since 2011 that Williams has missed the tournament.
"I've been in constant contact with Serena and her team and know this is why she has pushed it and pushed it until the 11th hour to make her final decision", he said.
The 2018 Australian Open comes just four months after the 36-year-old gave birth to a daughter, Alexis Olympia, with her husband, Reddit co-founder Alexis Ohanian.
Few players have successfully bounced back after giving birth, and even fewer have managed to go on to win Grand Slam titles. Murray has returned home after failing to recover from a hip injury sustained previous year, while Nishikori has been on the sidelines since August due to a torn tendon in his right wrist.
There are also fitness concerns regarding top seeds Rafael Nadal and six-time champion Novak Djokovic, although Nadal has landed in Melbourne and was seen hitting the courts.