The world number four has cited a problem with his knee after his semifinal run at the Australian Open last month.
“Stan called me this afternoon to give me the bad news,” the tournament director, Richard Krajicek, said on the official website.
“It was an unexpected thing, we are sorry both for us and him.”
Wawrinka required a Medical Timeout (MTO) in his five set loss to Swiss compatriot Roger Federer in the semifinal after a grueling start to the year.
The 31-year-old reached the last four in Brisbane where he crashed out to Kei Nishikori in straight sets.
Eyeing a repeat of 2014, Wawrinka dazzled in his quarterfinal victory over Jo-Wilfried Tsonga but found himself two sets down against Federer in the semifinal.
The three-time Grand Slam champion rallied, but was unable to withstand the Federer bombardment in the fifth set and double-faulted to ultimately gift his long-time Davis Cup teammate a place in the final.
A star-studded field
Though many will miss his eye-pleasing backhands and baseline grinding, Rotterdam promises to be a tournament for the ages, with several top 20 players in attendance.
Australian Open finalist Rafael Nadal will headline the draw and will be eager to build upon his impressive hard court form in central Europe.
Marin Cilic is still recovering from the hangover of his Davis Cup agony and, alongside Dominic Thiem, will be looking to kick-start his 2017 campaign.
Tomas Berdych, defeated by Wawrinka in the 2015 final, returns while David Goffin is fully capable of adding another ATP title to his growing collection.
Tsonga, meanwhile, will be tipped to go deep in the tournament and Grigor Dimitrov, fresh off a semifinal appearance in Melbourne, should be eyeing a second title of the fledgling season.
Wawrinka was set to be the top seed in Rotterdam but will be replaced by the mercurial Benoit Paire of France.