"A couple of weeks ago I saw my career [future] very difficult. Things now are better in that way without a doubt. But as I always said the most important thing is happiness over any title.
"I can't risk that much and stay two-three months out of competition because that would be tough for me. If that happens, it happens, but not because I wasn't doing things properly."
Reports in Spain claimed Nadal had a 7mm tear in his abdominal muscle after undergoing scans.
Nadal was due to practise on Friday but failed to turn up at the scheduled time. He later arrived at the Wimbledon grounds and trained on Aorangi Park for 45 minutes.
The withdrawal of the two-time Wimbledon champion means Kyrgios will face the winner of Cameron Norrie and Novak Djokovic's semifinal, which will take place on Centre Court on Saturday.
A walkover into the final has never happened at Wimbledon but in 1931 the final wasn't played after Frank Shields gave a walkover to Sidney Wood after the United States Tennis Association told him to rest his injured knee in a bid to be fit for an important Davis Cup match.
Kyrgios vs Nadal is only the second walkover in a grand slam men's semifinal or final during Open Era. The first came in 1992 at the Australian Open semifinal when Richard Krajicek defaulted from his match with Jim Courier because of tendinitis in his shoulder.
Kyrgios and Nadal haven't got on in the past but the Canberran took to Instagram after the announcement to wish his rival well.
"Different players, different personalities. @rafaelnadal I hope your recovery goes well and we all hope to see you healthy soon. Till next time," Kyrgios wrote alongside a photo post of the two players shaking hands at the net.