Williams announced the decision on Thursday. The 36-year-old was set to return to Melbourne after giving birth to daughter Olympia on Sept. 1. She lost her first match since January on Dec. 30, falling 6-2, 3-6, 10-5 to Latvian Jelena Ostanpenko in an exhibition match in Abu Dhabi.
Her last victory came in the 2017 Australian Open, when she clinched her 23rd Grand Slam title with a win over sister Venus Williams for the women's singles title.
"After performing in my first match after giving birth I realized that although I am super close I'm not where I personally want to be," Williams wrote Thursday on Snapchat. "My coach and team always said 'only go to tournaments when you are prepared to go all the way.'"
"With that being said I am disappointed to say I've decided not to compete in the Australian Open this year. However, the memory of last year's Open is one that I will carry with me and Olympia and I look forward to coming back again. I appreciate the support and understanding of my fans and everyone at the Australian Open."
Andy Murray, Kei Nishikori and Svetlana Kuznetsova have also withdrawn from the tournament. Rafael Nadal, Novak Djokovic, Stan Wawrinka, Victoria Azarenka, Garbine Muguruza and Carolina Garcia are in doubt for matches in Melbourne.
Williams is ranked No. 22 in the WTA rankings.