The world number three, who completed his set of grand slams by winning in New York in 2010, was forced to miss the Olympics and the Masters Series events in Toronto and Cincinnati with the injury, and announced on Wednesday he is still not ready to compete.
Nadal said in a statement: "I am very sad to announce that I am still not ready to play and have to withdraw from this year's US Open in NYC.
"I am sorry since I always found great crowds and great support, but I have to continue with my recuperation and preparation to be ready to play in the right conditions.
"I want to say hi and thanks to all the fans, in particular to the New Yorkers. I'll miss you all this year at the Open!"
While the announcement will come as a big disappointment to the tournament and Nadal's many fans, it is not unexpected.
The 26-year-old has not played since his shock second-round defeat by Czech Lukas Rosol in the second round of Wimbledon in June, after which he hinted all was not well.
Nadal subsequently pulled out of a scheduled exhibition against Novak Djokovic in Madrid citing knee problems and then announced he would not be able to defend his title at the Olympics, where he had been due to carry Spain's flag at the opening ceremony.
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Nadal has been dogged by knee problems throughout his career, although he has stressed this injury is not related to his previous problems, and took a month off after the Australian Open this year to give his body a rest.
He has always found hard courts the most wearing on his joints, and when he pulled out of Toronto and Cincinnati it became increasingly unlikely he would risk returning to the circuit at the year's final grand slam.
Nadal, who is now almost certain to lose his world number three ranking to Andy Murray, reached the final of the US Open last year for the second year in a row but lost in four sets to Novak Djokovic.
Tournament director David Brewer said: "Rafa has informed us that he will not be ready to compete at the US Open this year and has withdrawn from the tournament.
"We hope to see him back on the court soon and look forward to his return to New York next year."
The US Open begins at Flushing Meadows on August 27, with Roger Federer and Djokovic heading the men's rankings, while David Ferrer is likely to be elevated to fourth seed.