The 28-year-old Queenslander's manager Sam Halvorsen said Johnson, who would have been one of the most sought-after names at the January 19 auction, is likely to give the third edition of the tournament a miss.
The decision could cost him US $200,000.
Halvorsen said apart from keeping himself fresh for national duty, Johnson's decision to skip the March 12 to April 25 tournament has been influenced by the newly-laid rules of the auction process.
"We want to protect him from the wear and tear. The decision was made easier because of our concern over the auction process," Halvorsen was quoted as saying in the Daily Telegraph.
"He might have been able to play half the tournament but at this stage we feel the break will be better for him," he said.
As per the rules, a player is unable to choose the team he wants to play for or negotiate the size of his contract.
Mascarenhas to replace Malinga for Tasmania
Climate: India refers to Australia as 'ayatollah'
Australia beat West Indies by 35 runs
Australia retain squad for third Test vs Windies
BBC apologises for Boycott's four-letter rant