MacGill was replaced by Brad Hogg in one of three changes to the Australian team that crushed Zimbabwe by an innings and 175 runs in last week's first test in Perth.
Fast bowler Brad Williams was selected to make his test debut after Jason Gillespie was ruled out with a torn muscle and middle-order batsman Simon Katich replaced the injured Darren Lehmann.
MacGill injured his calf while bowling in the first test but was hopeful of recovering in time for the second match at the Sydney Cricket Ground.
"He's a pretty tough sort of character but I think he probably realised today it was beyond him," Australia captain Steve Waugh said.
"He did have a separation in the muscle, which is a slight tear, and as
Hogg has played three previous tests for Australia and was a member of the one-day team that won this year's World Cup but this will be his first test on home soil.
Katich will also be playing his first game at home after his only previous test appearance on the 2001 Ashes tour of England. He was called up after Lehmann was ruled out with an Achilles problem.
Williams earns his first cap after the injury-prone Gillespie strained a muscle in Perth.
Williams was 12th man in that match and his promotion allowed Nathan Bracken to come into the squad to carry the drinks in Sydney.
Australia - Steve Waugh (captain), Ricky Ponting, Justin Langer, Matthew Hayden, Damien Martyn, Simon Katich, Adam Gilchrist, Andy Bichel, Brett Lee, Brad Hogg, Brad Williams, Nathan Bracken (12th man)