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Adams was last week named in a 25-man wider squad for the tournament in China, which begins at the end of August, but has confirmed through his agent that he won't be taking part.
Basketball New Zealand confirmed his decision on Twitter.
"Steven's support of the Tall Blacks and his interest in playing for the program at some point down the line is unwavering," a statement from his agent said.
"While he won't be participating this year with the National Team, his plan is to evaluate the opportunity to play in the 2020 Olympics following the upcoming NBA season."
The Tall Blacks could qualify for the Olympics if they finish higher than Australia at the World Cup, or through an Olympic Qualifying tournament next year.
Australia will have seven players with NBA experience in their World Cup squad including Philadelphia 76ers star Ben Simmons.
New Zealand open the tournament against Brazil on September 1 before facing Montenegro on September 3 and Greece two days later in their final group game.
NBA all-star Giannis Antetokounmpo has already confirmed he will play for Greece at the tournament.