After a pre-season in Monte Carlo with some players like Grigor Dimitrov - currently ranked 3rd, Viktor Troicki, ranked 55th, and Stan Wawrinka, ranked 9th, the season for Djokovic was supposed to start at the Mubadala World Tennis Championship.
The Serb has not played since retiring during his Wimbledon quarter-final against Czech Tomas Berdych in July and has continued to struggle with an elbow injury.
Williams, whose grand slam tally is just one shy of the all-time record held by Australian Margaret Court, said she was disappointed to withdraw but looked forward to returning in the future.
"My coach and team always said 'only go to tournaments when you are prepared to go all the way'".
A statement on Djokovic's website said: "After pulling out from Abu Dhabi and ATP Doha events due to pain in his right elbow, Novak is travelling to Australia where he will take part in two exhibition tournaments".
Her withdrawal comes less than 24 hours after fellow former world No. 1 Andy Murray withdrew from the men's event because of a chronic hip injury. I can compete - but I don't want to just compete, I want to do far better than that and to do so, I will need a little more time.
"The true champion Serena is has been demonstrated in the herculean efforts she has made over the past few months in her desire to play the Australian Open".
Serena has not played a competitive match since claiming a record-equalling slam at the Australian Open last year, having given birth to her first child in September.
"It was never going to be good enough for her to just compete, she wants to give herself the best chance to win", Tiley said.
Djokovic will make a decision on his Australian Open participation after playing in the two exhibition events.
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