"I have signed a new contract with the Dallas Mavericks," said the 32-year-old forward in a statement published by the German basketball federation on Tuesday.
"We have a new team with new conditions and I want to set my focus on the next NBA season this summer."
Nowitzki, a nine-time NBA All Star who first played for the Milwaukee Bucks back in 1998, has, however, made himself available for next year's European championships to try to help Germany win a place in the 2012 Olympics in London.
"Next year, I will help the team reach our big goal to participate at the Olympics again," said Nowitzki whose new four-year deal with the Mavericks, signed on Monday, is worth $80-million.
Germany are sure to miss the seven-foot tall (2.13m) Nowitski who led them to bronze in the 2002 world championships and silver in the 2005 European championships.
"I take Dirk's decisions with mixed feelings", said Germany head coach Dirk Bauermann. "We will of course miss Dirk in our squad."
"You can't replace a player like him. But we already know now that Dirk will be on board to fight for the tickets to the Olympic Games next year in Lithuania. I completely respect Dirk's decision."
Bauermann will now be concerned about whether fellow NBA star Chris Kamen of the Los Angeles Clippers follows suit.
On Monday, Russian international forward Andrei Kirilenko, who is playing with NBA side Utah Jazz, announced his decision to miss the world championships.