Williams has been struggling with a foot injury since mysteriously cutting her foot in Munich back in July, which eventually required her to have surgery to repair a damaged tendon.
She was pictured only last week arriving at an NFL game in Miami on crutches, and with her right foot in significant plaster.
Sportsnewsfirst.com.au understands Williams has told organisers she will not be attending the mixed team event because of injury, and they are now scrambling to find a replacement.
And it will also put some doubt over Williams' appearance at the Australian Open just days later.
It is the third time Williams has withdrawn from the Perth indoor event, with knee surgery ruling her out of the 2003/2004 event and a hamstring forcing her to pull out of the 2008/2009 version.
This time, it is the cuts she sustained when exiting a restaurant in Munich in the middle of the year, which have never fully been explained.
Williams initially received 18 stitches, but was then required to undergo more surgery to repair a tendon.
After withdrawing from the US Open, she returned to practice in September, but then put off her comeback by pulling out of tournaments in Tokyo, Beijing and Linz, Austria.
On October 10, in a posting on her official website, Serena said she "re-strained" her foot by overtraining and "likely" would be out of the year.
"Pushed by my desire to return to competition, I trained too hard too soon and re-tore the tendon in my foot," Williams said.
"As a result, yesterday morning I had to have another procedure to repair it."
Williams had been set to begin her 2011 season by playing a part in the best ever field assembled for the Hopman Cup alongside Justine Henin, Andy Murray, Novak Djokovic, Ana Ivanovic, Gael Monfils and Lleyton Hewitt.
It is unclear whether the US will withdraw from the event altogether, or a replacement will be found for Williams in the American team.
An announcement is due from organisers on Tuesday.