Murray has only just returned to action after 11 months on the sidelines due to a hip injury that needed surgery in January.
"It's with regret I'm withdrawing from Wimbledon," Murray said in a statement on Sunday.
"I've made significant progress in practice and matches over the last 10 days but, after lengthy discussions with my team and with a heavy heart, we've decided that playing best-of-five-set matches might be a bit too soon in the recovery process."
Murray was due to play France's Benoit Paire in the first round on Tuesday, but he had admitted on Sunday morning that there was a chance he could pull out if his body didn't feel right.
Just hours later, Murray dropped his bombshell, ending his hopes of adding another Wimbledon crown to those he collected in 2013 and 2016.
The 31-year-old Scot, whose ranking is down to 156, had played just three matches since making his comeback last week.
Murray was beaten by Nick Kyrgios at Queen's Club then saw off Stan Wawrinka at Eastbourne on Monday, but the former world number on lost to Kyle Edmund on Wednesday.
After pushing his body in practice sessions at the All England Club over the last few days, Murray has opted against risking a further injury setback with a view to playing the American hard-court swing that culminates in the US Open.
He is next scheduled to play in Washington beginning on July 30.
"We did everything we could to try to be ready in time. I will start practising on the hard courts from tomorrow and continuing with my rehab and recovery and I'm looking forward to the US hard-court season," Murray added.
"Thanks for all the messages of support and I'm excited to finally be back playing after so long out."
- 'Taking it day by day' -
Murray's place in the draw goes to Jason Jung of Taiwan, the world number 154 who has just one win on the main tour in 2018.
The American-born 29-year-old has never played a main draw match at the Slams.
Murray's hip problems played a huge role in his Wimbledon quarter-final defeat against Sam Querrey 12 months ago.
Since then, he has made late withdrawals from the US and Australian Opens, while also skipping the recent French Open.
Now he will miss his home Grand Slam for the first time since a wrist injury kept him away in 2007.
Murray's ranking will plummet to outside the top 800 as a result of his absence from Wimbledon.
While he insisted over the weekend that he still loved tennis too much to walk away yet, it remains to seen if he can ever recapture the form that made him Britain's finest male player since Fred Perry.
Speaking earlier on Sunday before deciding not to take his practice session at Wimbledon, Murray had outlined his problems on the road to recovery.
"I am taking it literally each day. Some days I feel better than others," he told BBC Radio Five Live.
"Some days I wake up and don't feel quite as good as others. It is a bit of stiffness, a bit of soreness, which is kind of normal based on the intensity I am practising at, compared to where I was even three or four weeks ago."