Djokovic and Nadal had expressed doubt as to whether they would play the December 22 match as Saudi Arabia is under growing pressure from the global community following the killing of Saudi writer Jamal Khashoggi after he entered Saudi Arabia's consulate in Istanbul on October 2.
Novak Djokovic of Serbia celebrates after winning his men's Singles finals match against Juan Martin del Potro of Argentina on Day Fourteen of the 2018 US Open at the USTA Billie Jean King National Tennis Center on September 9, 2018 in the Flushing neighborhood of the Queens borough of New York City.
The Serb told BBC Sport on Friday: "Nadal is injured, so the match is not happening this year".
Nadal's absence also ensures Djokovic will finish the season as year-end world No 1.
Nadal pulled out of the ATP Tour finals in London after having surgery on his ankle last week.
The matchup has been postponed due to the recent injury of Nadal, which forced him to withdraw from the recent ATP event and also undergo immediate surgery. 'And it's unfortunate that we are both drawn into this right now. So we are looking about how evolves the situation and I hope the things will clarify as soon as possible'.
"Unfortunately, I had the abdominal problem in Paris last week and, in addition, I have a free body in the ankle joint that has to be removed in the operating room".