The 14-time major champion, chasing Jack Nicklaus's record of 18 major titles, has plummeted to 79th in the world rankings after suffering a series of injuries and a severe slump in form.
On February 11 he used his website to announce he was taking a break from tournament golf in a bid to get his faltering game in shape, and on Friday he said he's not there yet.
"I spoke to Arnold today and told him that I will not play in his tournament this year," Woods wrote on his website.
"I've put in a lot of time and work on my game and I'm making strides, but like I've said, I won't return to the PGA Tour until my game is tournament ready and I can compete at the highest level."
Woods, who last won the event at Bay Hill in 2013, has not played since withdrawing from the Farmers Insurance Open in early February with stiffness in his back that he said came on during a lengthy fog delay.
He made his return in June of 2014, missing the cut in the US PGA Tour's National at Congressional and finishing equal 69th at the British Open -- the worst 72-hole major finish of his pro career.
Overall, in six PGA Tour events since he returned to competition at the National, Woods has missed three cuts -- including at the 2014 PGA Championship -- and withdrawn twice.
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