Despite successfully retaining his European title earlier this summer, Cook was controversially overlooked by GB Taekwondo for the under-80 kilograms place at the Games in favour of Lutalo Muhammad, and has since sought to overturn what his camp view as a flawed decision.
However, the British Olympic Association (BOA) last week ruled there was not sufficient new evidence for GB Taekwondo to be forced to reopen their selection process and also did not allow Cook to take his case to the Court of Arbitration for Sport (CAS).
With the prospect of a costly challenge at the High Court, Cook - who has been self-funded since leaving the GB Taekwondo Academy programme last year - has reluctantly given up on his Olympic dream and confirmed he would not be taking the reserve place for the British squad.
"After careful consideration over the last few weeks, and despite my representatives advising me that I still had a good chance of successfully overturning the BOA's ratification of Great Britain Taekwondo's decision not to select me for London 2012, I have decided not to take my case against the BOA to the High Court," Cook said in a statement.
"The financial implications for me, and, more importantly, for my parents, of doing so are too prohibitive.
"I am really disappointed that the BOA did not agree to my case being heard at the Court of Arbitration for Sport. It is the specialist forum for sports-related matters.
"The High Court is significantly more expensive, time-consuming and does not have the experience or expertise in dealing with sports-related disputes."
Cook has always maintained his decision to go it alone following a disappointing early exit from the 2011 World Championships - where Britain went on to win four medals, including gold for Sarah Stevenson - was ultimately behind the decision to exclude him from the Olympic squad. GB Taekwondo refute this claim.
Although the World Taekwondo Federation (WTF) have been less than impressed by the whole saga, the outcome of their own internal review into the Team GB selection process appears to be too late for Cook.
"I welcome this investigation, but I am hugely disappointed that the WTF have now indicated that they will not finalise the review and findings in time for London 2012," Cook continued.
"This is particularly disappointing as the BOA had reserved the right to reconsider its decision to ratify Great Britain Taekwondo's nomination in light of the WTF's findings.
"I do hope that the WTF will consider after the Games a new automatic selection criteria for the top 10 athletes in the world rankings in each weight category for future Olympics and World Championships.
"I also hope that UK Sport and the BOA act to resolve the long-term issues that have been revealed by my case."
Cook confirmed it would have been "hugely difficult" to take up the reserve place for Team GB and wished the rest of the squad the "very best of luck" for the Games.
He added: "The Olympics, and especially a home Olympics, would have been the pinnacle of my career. I feel totally devastated.
"I will sit down with my team though and consider my best way forward in the coming months."
The chief executive of Cook's management company Professional Sports Group, Jamie Cunningham, echoed the disappointment of his client.
He said: "In 20 years of working with elite athletes in sport, I have never come across anything quite like Aaron Cook's situation with Great Britain Taekwondo and the British Olympic Association.
"Aaron has been let down by British Taekwondo and its benefactor UK Sport, which contributes the majority of its funding through taxpayer's money.
"Most recently Aaron has been let down by the BOA which still had the power not to ratify the nomination of Lutalo Muhammad for a second time but decided not to do so, despite having concluded that the second selection decision was flawed after Sport Resolutions had decided that the original selection decision was flawed.
"I am sure that the complete story will emerge in time."
The BOA released a statement in response, hailing Cook as a "champion" for his message of support to the rest of the Olympic squad.
The statement added: "Aaron has our commitment that the BOA will continue to work with our Athletes' Commission, the national governing bodies and other sport stakeholders to make certain selection procedures across all Olympic sports are fully understood by everyone involved, are applied fairly and consistently, and have the best interests of athletes and their sport at heart."
GB Taekwondo later released a statement in response to Cook's decision, and maintained the door would always be open for the 21-year-old to represent his country in the future.
The statement read: "GB Taekwondo fully respects Aaron's position and understands his decision not to take up the reserve place. We appreciate his good wishes for the team.
"This has been a difficult and unsettling period for both athletes concerned, as well as for the GB team as whole.
"However, Aaron is a world-class athlete who still has a very bright future in the sport and we would hope that he continues to be available to represent Great Britain in the future."
As well as Stevenson and Muhammad, Wales' Jade Jones, 19, and Liverpool fighter Martin Stamper were the other fighters ratified for Olympic selection.
GB Taekwondo's statement concluded: "With just four weeks before the Opening Ceremony, the focus must now be to ensure that the Great Britain team has the best prepared athletes at London 2012.
"Four incredibly talented taekwondo athletes have been selected to represent Team GB and they will give all they can in trying to deliver British medal success in London this summer."