The 17-year-old announced late on Tuesday she was pulling out of the Brisbane event due to a left adductor muscle tear and she will also mix next week's Hobart International.
Barty was scheduled to play world No.4 Maria Sharapova at Pat Rafter Arena on Wednesday after claiming an upset first round win over veteran Daniela Hantchukova on Tuesday.
Barty said she'd opted to withdraw from her hometown event despite the lure of taking on four-time grand slam winner Sharapova in the hope of being fit for the Open in Melbourne.
"It's a tough decision but a smart one that we have to make," Barty said.
"It's pretty much just I need give myself, my body, 10 to 12 days to recover and hopefully be right for the Australian Open.
"From the medical advice that I received, should be fine."
Barty will remain in Brisbane for the next week before heading to Melbourne to prepare for the opening grand slam of the year.
Her withdrawal sends Sharapova straight into the quarter-finals of the Brisbane International where she'll play 2012 finalist Kaia Kanepi after the Estonian beat Spanish eighth seed Carla Suarez Navarro 6-2 6-2 on Tuesday.
Barty says despite her injury, if she plays at the Australian Open she still intends to compete in the singles and doubles alongside West Australian Casey Dellacqua.
Barty and Dellacqua reached three grand slam doubles finals in 2013, including at the Australian Open.
The teenager admitted she and coach Jason Stoltenberg had contemplated pushing through the pain barrier for the experience of playing Sharapova but decided withdrawing was the only option in the end.
"It's not every week you get opportunities like this to play against the best players in the world," she said.
"Of course it was a little bit in me and also Jase, my coach, as well. We really wanted to go out and have a go.
"Unfortunately, I would just make it worse, and that's just no way to go out and play a tennis match really."