Capriati, 28, who has won the event twice, said Wednesday she has not fully recovered from the injury, suffered in late 2004.
A back injury kept her out of the tournament last year.
The 2005 open begins at Melbourne Monday.
The American veteran is the latest big name on the women's side to pull out of the open because of injury, joining Belgians Justine Henin-Hardenne (knee) and Kim Clijsters (wrist). The two were champion and runner-up in 2004.
Capriati, a former world No. 1, won back-to-back titles at Melbourne in 2001 and 2002.