The 28-year-old won the Grand Slam in 2012 and 2013, but is “unable to travel to Australia this year”, organisers said.
She has previously missed tournaments owing to an ongoing child custody battle.
Azarenka, currently ranked 210 in the world, had been given a wild card entry into the tournament, which begins on January 15.
Tournament director Craig Tiley tweeted: “It’s unfortunate that @vika7 is unable to travel to Australia this year. The #AusOpen is her favourite tournament and she’s looking forward to returning to Melbourne next year.”
Last week, reigning ladies singles champion Serena Williams said she would not play in Melbourne.
The former world number one said she was “super close” to being tournament-ready but reluctantly withdrew from the competition.
It was due to be her first Grand Slam since giving birth to daughter Alexis Olympia in September.
Andy Murray, Kei Nishikori and Svetlana Kuznetsova have also withdrawn.