The 30th-seeded Williams was scheduled to play Marta Domachowska of Poland in the first round. The tournament begins Monday.
"I have many great memories from competing at the U.S. Open and I regret that I will not be able to participate in 2006," said Williams in a statement issued by her agent.
Williams captured the U.S. Open championship in 2000 and 2001.
"I will miss the excitement of competing in front of the New York fans at one of the premier sporting events in the world," Williams said. "I look forward to returning in 2007."