The Scot burst past Olympic champion Jakob Ingebrigtsen and clinched a surprise gold in Eugene a year ago.
The 28-year-old went on to claim Commonwealth 1500m bronze and European 800m silver, but suffered a stress fracture of his foot earlier this year.
Wightman is yet to race this season and was going to miss the UK Championships.
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As defending champion, he was guaranteed a place in Budapest despite missing those trials, but has opted not to run.
“I’ve always felt as though time has been on my side to overcome my problems fully, however it has run out,” Wightman wrote on Instagram.
“This means I’m sadly going to be unable to compete at the Worlds, which has been really gutting to come to terms with.
“There are some risks I could have taken to be on that Budapest start line, however the potential to jeopardise my Olympic year makes this the obvious decision.”
The decision follows his withdrawal from last week’s Diamond League meet in Lausanne, which was to be his comeback race.
Written by: Debby Eselebor