"I have decided not to take part in the Serbian Open to try get some much needed rest. This is probably one of the most difficult decisions I have made in my career," Djokovic said in a statement on his website.
"But it is impossible for me to play in the coming days and think of tennis when other things are on my mind."
Djokovic lost to Spain's Rafael Nadal on Sunday in the Monte Carlo final, where he said he had trouble concentrating after the death of his grandfather last week.
The Serbian Open is held from April 30 to May 6, with total prize money of 418,700 euros ($551,507).
Djokovic recently said his main focus this year would be on the Olympic Games and the French Open, a Grand Slam win that would see him hold all four major titles at once.
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