Bulgaria's Grigor Dimitrov beat fourth-seeded Dominic Thiem of Austria at the ATP World Tour Finals 6-3, 5-7, 7-5 at the O2 Arena here on Monday.
Nadal - who has withdrawn five times in 13 previous ATP Finals, losing twice in finals - said he would work hard to be ready for the start of the next season and for the Australian Open in January.
"My season is finished".
Nadal pulled out of the Paris Masters at the quarterfinal stage 10 days ago and admitted ahead of the ATP Finals on the indoor hard-court he struggles on, that his knees, which have caused him trouble throughout his career, were still "not ideal".
Both players began the encounter hitting the ball crisply from the baseline but Thiem was the first to be broken in the sixth game of the match and Dimitrov maintained the advantage to close out the opening set without facing a single break point. "Yeah, I had the commitment with the event, with the city, with myself". "This is where I always wanted to be at, among the top players, also being able to come through in my first match, it's only positive".
The Belgian composed himself to hold and then earned three more match points but Nadal, showing incredible grit and playing right at the limit, saved all three to take it to another tie-break, which he won.
"The good thing is, [this injury is] nothing new", Nadal said.
"It was tough even if he was not moving 100 percent", Goffin said. "Everybody of my team, we have the right experience on this thing".
Nadal's withdrawal leaves Roger Federer as the only headliner standing in a tournament now looking seriously short of star power.
Nadal's exit has opened the door for 19-time major victor Roger Federer to claim a record seventh ATP Finals crown.
In a topsy-turvy decider, Dimitrov served for the match but blew his chance as Thiem broke back to level the set at 5-5.
"I know the periods of time that I need (in order for the treatment) to work".