The 14-time Grand Slam title winner will therefore miss November's ATP World Tour Finals in London.
Nadal, 28, made his announcement after losing 6-2 7-6 (7-4) to Croatian teenager Borna Coric in the quarter-finals of the Swiss Indoors on Friday.
"I'm not going to Paris and London - I'm not competitive enough," the nine-time French Open champion said.
"I am going to have surgery on 3 November."
Nadal had already qualified for the ATP World Tour Finals event, so the Spaniard's withdrawal means the player ranked ninth in the final ATP Race to London rankings will make it through to the season-ending event at the O2 in Greenwich.
Britain's Andy Murray will compete in next week's Paris Masters, which is the final ranking event of the season.
The Scot, 27, currently lies in eighth position in the Race to London standings.
The Swiss Indoors in Basel was just the third tournament Nadal had played since Wimbledon following a wrist injury, and he revealed earlier this month that he was on a course of antibiotics for his appendix.
Coric, 17, showed no fear as he raced into a 5-0 lead against a wayward Nadal and held his nerve to secure a stunning victory.
Coric learned his tennis travelling between Zagreb and north London under the guidance of British coach Ryan Jones, although the pair have gone their separate ways in recent days.
The Croat goes on to face Belgian David Goffin in the semi-finals, with Ivo Karlovic up against Roger Federer, who beat Grigor Dimitrov 7-6 (7-4) 6-2.
Rafael Nadal has confirmed he will not play again this season and says he will undergo appendix surgery next month.