Agassi's withdrawal comes following his decision to skip the 2006 clay-court season, which means he also will miss the French Open.
Agassi, 35, sprained his ankle in October while playing racquetball with a friend in Las Vegas, and was forced to quit following his opening match at the Masters Cup a few weeks ago.
"Until this is better, I can't make any sure statements," Agassi said. "I have hope that the next week or two will be big, big gains. The ankle is worse now than it was two weeks ago."
Recently, doctors said the former world No. 1 needed 6-8 weeks to recover, but he played at the Tennis Masters Cup in Shanghai and with his wife, Steffi Graf, at a charity event in Virginia.