The 21-time grand slam champion was due to face Elina Svitolina in Perth as United States take on Ukraine in their Group A opener.
Serena Williams battling knee injury in Perth
World number one Serena Williams is battling an early-year knee injury, withdrawing from United States' Hopman Cup tie on Monday.
But an inflamed knee led to Williams being replaced by Victoria Duval, although the 34-year-old is confident of featuring on Tuesday.
"I had every intention to play this morning," she said.
"Unfortunately, due to inflammation in my knee, I need to rest. I am confident to be out there against Australia Gold tomorrow evening."
Williams is eyeing a seventh Australian Open title this month and her injury comes as a blow to her preparations, just a fortnight out from the start of the year's first grand slam.
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