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Rawlinson, who won world titles in 2003 and 2007 and was Australia's best chance of a track gold medal at Beijing, appeared to be on the road to recovery in Poland last week when she competed for the first time in nine months.
But Rawlinson's manager, James Ward, said Wednesday that complications stemming from the toe injury, including
Achilles and calf ailments, would prevent her from competing in China.
"Her time in Poland was her slowest in eight years," Ward said. "She's done very little training since then, and when she trained on Tuesday, she couldn't run in a straight line."
Rawlinson said she had exhausted all medical options.
"I haven't been able to train for more than two days straight over the past 26 weeks, so I'm not arrogant enough to think that on that basis I'd be able to compete at the Olympics," she said. "I'm very upset because the Olympic Games has always been a dream of mine, but I'm trying to remain positive and I'm looking beyond the Olympics to other challenges."
Rawlinson will now switch her focus to next year's world championships in Berlin, where she will try to become the first Australian runner to win three world titles.
"I love my sport too much to end on this note, so I can definitely say that I will be setting my sights on the next goal, which will hopefully be the world championships next year," she said.
The 25-year-old Rawlinson won her 2003 title as Jana Pittman and went into the Athens Olympics as one of the favorites, but finished fifth
after injuring her knee in training.
"It is devastating for her," Ward said. "She's very unlucky to have had this happen two Olympics in a row. Both times she's had to battle injuries. She gave it every opportunity, but it's not going to happen."
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