Murray told the press that he regrettably won't be playing the Australian Open this year, stating that he is "not yet ready to compete".
Andy Murray has given up on his Australian Open dream and is heading home, having admitted that his problematic right hip is still in no state to play top-level tennis.
Murray says he will decide by the weekend whether to stay in Australia or fly home to assess his next move.
Australian Open's tournament director Craig Tiley said he respected what was a "very hard decision for Andy".
"I just want to be able to play tennis", he said in a news conference on Sunday.
"Andy, we miss you and we hope to see you back soon!"
"Katie is a player I've been watching for a while", said Murray, now out in Australia as he agonises over whether to play at the Aussie Open.
"Obviously continuing rehab is one option".
Days after pulling out of the Brisbane International, Andy Murray confirmed that he would not be competing at the first Slam of the year in Melbourne.
Murray has not played a competitive match since a Wimbledon quarter-final loss last July due to the complaint and despite coming through a one-set exhibition in Abu Dhabi last week, he was unable to train on Tuesday and announced his withdrawal.
Five-time champion Federer, of course, remains the strong favourite to lift another title. After battling against the odds to get back on court, the former world No1 was forced to bow to the logic of his own declaration in November: "I'll come back when I'm ready and a hundred per cent fit".
Novak Djokovic, despite withdrawing from Doha this week with elbow pain, is scheduled to play two exhibition events next week at the Kooyong mixed round-robin event and then the Tie-break Tens evening at Melbourne Park.
The Aussie, former Wimbledon champion had surgery on both hips during his career and while he never won again at grand slam level, he did return to winning tournaments. He said that while surgery "is an option" the chances of a "successful outcome are not as high as I would like" and is hoping to avoid going under the knife.
But he added that surgery "is something I may have to consider". "It's quite demoralizing when you get on the court it's not at the level you need it to be to compete at this level". Federer, 36, played only 12 tournaments previous year, compared to Nadal's 18.