The 40-year-old Pettitte informed the Yankees that he would not appear on manager Joe Torre's roster for the tournament, general manager Brian Cashman confirmed.
Pettitte had expressed interest in playing for Team USA last season, and Torre kept a spot open on the provisional roster for the veteran left-hander, with official rosters not due until Feb. 20.
However, Torre said recently that the Yankees had voiced concerns about Pettitte taking part in the tournament, given the hurler's recent injury history.
Pettitte was 5-4 with a 2.87 ERA in 12 starts for New York after coming out of retirement, but lost more than two months to a fractured left ankle when he was hit by a batted ball in late June.
The Yankees have three confirmed participants for the Classic: first baseman Mark Teixeira (Team USA), second baseman Robinson Cano (Dominican Republic) and catcher Francisco Cervelli (Italy).
Bryan Hoch is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.