The three-time major champion had entered in this week's event in Brisbane, but withdrew late. There was optimism after he replaced Novak Djokovic during last week's Mubadala World Tennis Championships.
Murray makes short statement to announce withdrawl
Very brief in his remarks regarding the news, the five-time Melbourne finalist said ""Sadly I won't be playing in Melbourne this year, as I am not yet ready to compete. 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 decision to not play in the year's first major is in stark contrast to last year, when Murray entered Melbourne as the top seed and favorite only to be upset in the fourth round by Mischa Zverev. For now, Murray has chosen rehabilitation over surgery.
Australian Open tournament director also issues statement
Following Murray's announcement, tournament director Craig Tiley also released a statement, which read as follows:
"We are fully aware that Andy has been going through a difficult period with his hip and that he's done everything possible to prepare for the Australian summer.
"Personally, I also know that Andy loves tennis and would do anything to play. This is a very hard decision for Andy and we totally respect it.
"We wish him the absolute best on his road to recovery and look forward to having him back in Melbourne. He is a true champion and one of our favourites."
Murray has lost finals in Melbourne to Roger Federer in 2010 and Djokovic in 2011, 2013, 2015 and 2016.