The world number three has been suffering from appendicitis in recent weeks, but had been hoping to delay surgery until the end of the season.
After losing to 17-year-old Borna Coric at the Swiss Indoors in Basel earlier today, the Spaniard told Sky Sports News: "I'm not going to Paris and London. I'm not competitive enough. I am going to have surgery on November 3.
"I need to work on my back a lot. Since Australia I'm not 100% recovered. That needs time and a period of five weeks to work hard again.
"I need to try to fix all the things that bother me. I'm going to work for one month in December and I will be back at the start of 2015."
Nadal's withdrawal from the event means that the player ranked ninth in the race will take part in the tournament.