"The Serb announced that ... he will take time out to rest before continuing with his planned calendar at the Rome and Roland Garros tournaments," a statement on the Madrid Open's official site (www.madrid-open.com) said.
Djokovic has been in imperious form this year, following up his triumph at the Australian Open with victories at the Masters events in Miami, Indian Wells and Monte Carlo.
The Serb won the Madrid title in 2011, beating Nadal in straight sets in the final.
The Spaniard has won the tournament on four occasions (from six finals), including the last two editions.
With Rafa Nadal yet to get back to top form after illness and injury, many expect Djokovic to end the Spaniard's reign on clay at the French Open, the only one of the four slams the Serb has yet to conquer.
Image: Novak Djokovic
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