Meanwhile, Djokovic sent his "support and strength" to Andy Murray in a heartfelt message after the three-time Grand Slam champion issued a worrying update on his fitness.
The 23-time major victor played in an exhibition match in Abu Dhabi last week, losing to Jelena Ostapenko. She remained hopeful of making a return to Australia and defend her title but admitted that it's a tough task and therefore, chose to walk out.
Serena will sit one out, but is promising to return in future.
Williams said she isn't ready for top level tennis just yet.
"After pulling out from Abu Dhabi and ATP Doha events due to pain in his right elbow, Novak is travelling to Australia where he will take part in two exhibition tournaments", said a statement on Djokovic's website.More news: Conor McGregor Is Getting Absolutely Owned By Our Homegrown Aussie Flu
"With that being said, and even though I am disappointed about it, I've decided not to compete in the Australian Open this year", she said.
Other star players, including top-ranked Rafael Nadal, six-time champion Novak Djokovic and 2014 victor Stan Wawrinka, also are dealing with injuries.
"It was never going to be good enough for her to just compete, she wants to give herself the best chance to win", Tiley said.
"I've been in constant contact with Serena and her team and know this is why she has pushed it and pushed it until the 11th hour to make her final decision", he said.
The 30-year old Serbian is to return at the January 10-12 Kooyong Classic and is also scheduled to take part at the Tie Break Tens evening exhibition at Melbourne Park next Wednesday.