The Spaniard, who landed a record 10th French Open title at the weekend, had been tipped to take part in the famous competition, which starts on June 19.
However, the 31-year-old has revealed that his body "needs to rest" ahead of Wimbledon next month and as a result, the former world number one has withdrawn from the competition.
"My body needs to rest if I am going to be ready to play Wimbledon. I am sad to make this decision because I love Queen's, I won the tournament in 2008 and every time I reached the Wimbledon final it was after playing Queen's," Nadal told reporters.
Britain's Andy Murray, however, will take part at Queen's Club.