The 30-year-old has suffered an injury-ravaged career since winning the world title in 2011 when he was already European and Commonwealth champion.
Greene is now focusing on the 2018 Commonwealth Games on the Gold Coast.
"London is off the cards, I'm hoping to race towards the end of the year to qualify for the Commonwealth Games," Greene told BBC Sport Wales.
Greene picked up two fourth-place finishes at the London 2012 Olympics in the 400m hurdles and 4x400m relay.
"I finished my season pretty early last year because my groin was giving me problems," he explained.
"I was doing rehab between October and December and had my groin scanned again in January. It had got worse and they had to strip it right back.
"Perhaps in the past I might have tried to push through the pain. Because I am older in my career I want to make sure I have a good few years. So I have to look after myself in the short term over the next six months.
"It is disappointing but it's the hand I have been dealt."
Greene says that "I still want to get back to the level I was," despite his injury problems.
"I have had a bad hand over the last couple of years and this is the last thing that needs to be sorted," he added.
"Once I was told the news I wouldn't be racing this summer, I was so distraught for a few weeks.
"That made me realise how much I still wanted to be part of the sport at the highest level. So I am still training, doing my thing and looking to get back to the form of a few years ago."
Greene was not helped after UK Athletics withdrew his funding last November for the 2017 season.
But the Llanelli hurdler insisted he could overcome the financial issues.
"The main benefit of having the funding was to get the access to the physiotherapists who are at Loughborough where I am based," said Greene.
"It just means I have to find other people out of the system or see the same people but out of the set hours."
Dai Greene says a groin injury has ruled him out of this year's World Championships in London.