The late entrant will get to play in the semi-finals directly as a result of the world No 4 pulling out with a stomach virus.
Search for lucky replacement on as Nadal opts out of Abu Dhabi
The tournament is not suddenly lacking for stars; five other players ranked in the top nine are entered in the three-day event, including the world No 1 Novak Djokovic and the No 3 Andy Murray.
Also, Nadal's ability to compete for a third championship at Abu Dhabi's International Tennis Complex, at Zayed Sports City, was in question because he has not played since losing in the second round at Wimbledon on June 28, an inactive span which saw his world ranking fall to No 4.
He remains, however, perhaps the biggest name in the sport after Roger Federer, and many in the global tennis community were keen to see how far he has travelled on the road to health, having nursed his aching left knee for half a year.
"Of course we're disappointed," said Vickie Gunnarsson, the event director. "We were very excited for him to be here, to be back, back in front of the fans. It's not good news for the tournament."
IMG, the company that runs the event and also represents Nadal, spent hours on Christmas Day searching for a replacement. Gunnarsson declined last night to speculate about possible candidates to replace Nadal in the elite, six-man field.
"I can guarantee it will be someone you've heard of," she said. "We're still working on it."
She said the replacement player would take Nadal's place in the bracket, seeded directly into the semi-finals on Friday, awaiting the victor of tomorrow's quarter-final match between Murray and Janko Tipsarevic, the world No 9.
"I am very disappointed that I will not be able to compete this year in Abu Dhabi," Nadal said in a statement released by IMG.
"I was really excited about returning to play and I always have a wonderful experience at the event and this is the first time I will miss the tournament.
"My rehab has gone well, my knee feels good and I was looking forward to competing," he said in the statement.
"Unfortunately, doctors have informed me that my body needs to rest in order to fight this stomach virus. I would like to say sorry to all my fans in the United Arab Emirates and around the world, but I hope to play and win in Abu Dhabi again next year."
Nadal, 26, won two of the previous four editions of the tournament and was runner-up to Murray in 2009. Organisers dismissed speculation that Nadal is out of the tournament because of lingering problems with his knee.
Over the weekend he told a television station in his native Spain that he did not expect to be at full strength before March.
"If Rafa says his withdrawal is because of a virus, it's because of a virus," said Greg Sproule, IMG's Middle East managing director.
He added "A player's health is always the No 1 priority so we understand that Rafa must follow medical advice. We wish him well with his recovery."
Speculation on his replacement immediately fell on Jo-Wilfried Tsonga, the world No 8, who played here last year.
Gunnarsson did not comment on a suggestion that Federer, who owns a home in Dubai and played in the first four stagings of the event, might join the field.
The other half of the bracket remains undisturbed. David Ferrer, the world No 5 and a finalist last year, plays Tomas Berdych, the No 6, in the second match tomorrow, and the winner advances to meet Djokovic, the defending champion, on Friday.
The final is on Saturday, and will be played after the third-place match, which begins at 5pm.
Gunnarsson doubted the loss of Nadal would hurt the event at the gate.
"We still have five of the top nine and tickets have been selling really well," she said.
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