Kei Nishikori also pulled out. Djokovic will take the decision after playing in two exhibition matches.
Former world number one Andy Murray has pulled out of the Australian Open after failing to recover from a hip injury, tournament organisers said on Thursday.
The three-time grand slam winner has not played a competitive match since a Wimbledon quarter-final loss last July and despite coming through a one-set exhibition in Abu Dhabi last week, the Briton has decided to focus on rehabilitation.
"Sadly I won't be playing in Melbourne this year, as I am not yet ready to compete," Murray, a five-times Australian Open runner-up, said in a statement.
"I'll be flying home shortly to assess all the options but I appreciate all the messages of support and I hope to be back playing soon."
The first grand slam of the year begins on January 15 at Melbourne Park.
World number 22 Kei Nishikori also pulled out of the tournament saying, "My rehab is going well but I am just not ready 100 percent to come back yet in best-of-five-set matches."
Former world number one Novak Djokovic's participation is uncertain as well. Djokovic has not played since he was forced to retire against Tomas Berdych in the quarter-finals of Wimbledon in July due to an elbow injury.
"Novak is travelling to Australia where he will take part in two exhibition tournaments," said a statement on 12-time Grand Slam winner's website early on Thursday.
"After the two events, the decision will be made about his participation at the first Grand Slam of the season, the Australian Open, where 'Nole' has been crowned champion six times."
World number one Rafael Nadal, the reigning French Open and US Open champion, pulled out of Brisbane with a knee injury, but the Spaniard has said he still intends to be on court at the Australian Open.
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