The Canadian had been tipped as a contender for the yellow jersey, but sustained what his Garmin-Sharp team described as "a massive haematoma on his left hip and leg" on stage six and opted out of the race ahead of the 199-kilometre route from Tomblaine to La Planche des Belles Filles.
Garmin-Sharp directeur sportif Jonathan Vaughters wrote on Twitter: "Hesjedal is not going to start. Sad, but he'll be back."
Hesjedal was involved in a major collision around 26km from the end of Friday's stage to Metz, losing more than 13 minutes as a result.
It was a crash his British team-mate David Millar, riding in his 11th Tour, described as one of the scariest of his career.
Almost all of the Garmin-Sharp team were involved in the collision, with Tom Danielson abandoning as a result of the incident after dislocating his shoulder and suffering numerous other injuries.
Hesjedal had been the best-placed Garmin-Sharp rider at the start of the day in 108th and his absence meant the team were set to revise their goals, with Irishman Dan Martin and Millar poised to be given opportunities to go for stage wins.
Garmin-Sharp were reduced to a team of six when South Africa champion Robbie Hunter also abandoned.
Hunter wrote on Twitter: "Got stress fractures in a vertebrae. Been trying to ride through the pain but woke up this am & I'm battling to walk never mind ride.at this point I gotta worry about my health!"
Hesjedal and Hunter were among eight riders who finished on Friday, but did not start on Saturday, taking the total number of withdrawals to 16 after 198 riders began last Saturday in Liege.
Spanish team Movistar now have five riders after two more abandoned, two withdrew from Dutch squad Rabobank, Oscar Freire from Katusha quit, along with Amets Txurreuka (Euskaltel-Euskadi) and Hubert Dupont (Ag2r La Mondiale).
Anthony Delaplace (Saur-Sojasun) abandoned early in the day's stage, taking the total number of withdrawals to 17.
It was the most after seven days' racing since 1998, when the 17 withdrawals included the Festina team who were expelled following a doping scandal.