Earlier this week the 27-year-old sustained a bone fracture whilst training in the gym and will require six weeks of recovery, according to a post on his social media.
"I've fortunately never had to deal with an injury in my swimming career so this is a real blow and a new challenge for me," Peaty wrote.
"I work extremely hard and have dedicated my life to my training so I can be the absolute best I can be in the pool. I was on track for a huge summer so, like when anything doesn't go according to plan, it's a really challenging time."
The British swimmer was on track to become the first man ever to win four successive doubles at the World Championships, having held the 50m and 100m titles since 2015.
With that target no longer obtainable, Peaty will now turn his attentions to this summer's Commonwealth Games in Birmingham where he will attempt to defend his 100m breaststroke gold and convert his 50m silver from 2018 into gold.
"I'll never shy away from a challenge but on this one, I've got to use my head more than my heart," continued the five-time Olympic medallist in his post.
"I will be back in the pool as soon as I can be with my focus now on recovering and building up my strength ahead of the Commonwealth Games this summer."