Nadal has returned to top form this season after spending seven months out with tendinitis, winning the French Open, US Open and eight tour titles to become world number one ahead of Novak Djokovic and Andy Murray.
The 27-year-old used his official Facebook page to announce his decision this afternoon, positing: "Hi all, sorry to announce that I won't travel to Basel in Switzerland but after very exhausting weeks I have to regroup my fitness and my body. I will do my best to come back to the Swiss Indoors next year."
With qualification secured for the World Tour event Nadal has decided to prioritise success at the 02 Arena, with the tournament beginning on November 4.
Nadal has never won the final event on the tour calendar, with his best effort a defeat to Roger Federer in the final four years ago.