Bautista-Agut won the tournament in Chennai last week, but picked up a virus in the Indian city.
He arrived in Auckland on Wednesday around 1pm and tried to train, but still felt symptons and pulled the pin at 11am on Thursday.
"He left the decision as late as he could but unfortunately is not well enough to be playing in the ASB Classic," said tournament director Karl Budge. "I know if he could play he would play."
Budge admitted it had been a frustrating fortnight, after the disruptions of last week.
"It's been a challenging two weeks but we can't control weather and injuries are a part of sport. "
A downcast Bautista-Agut said he got sick early in the tournament last week.
"In India you have to eat well and take care a lot and even doing things well and trying to do everything right I got the virus," said Bautista-Agut. "I don't feel 100 per cent to play.
"A few years ago I tried to play here without feeling good and I don't want to do the same.
This tournament is a great event - one of my favourite 250's in the year. "