Right decision
Federer should have led Switzerland, but that will have to wait for some other year, with the 20-time Grand Slam champion opting out of the tournament.
The 38-year-old apologised to his fans and tournament organisers, but felt he had taken the right decision.
Longer period
"It pains me to not be a part of the most exciting new event on the calendar, but this is the right thing to do if I want to continue to play for a longer period of time on the ATP Tour.
"I am sorry for any inconvenience or disappointment my withdrawal may cause for the fans, but I hope you can understand why I made it.
Ready for Melbourne
Federer will now begin his 2020 season with the Australian Open, which will be held from Januray 20 to February 2 at the Melbourne Park.
"For my Australian fans, I look forward to seeing you all at the Australian Open, fresh and ready to go," Federer added in his Facebook post.
Back for Olympics
The 38-year-old, who won four ATP titles this season, including a record-breaking 10th Swiss Indoors Basel title at home, had also pulled out of the ongoing Paris Masters tournament.
However, he has committed himself to play at the 2020 Tokyo Olympics, revealing his "heart decided" to compete again, after missing the 2016 Rio Games due to injury.