The qualifying event in late June was scheduled to take place in Taiwan, but was relocated to Mexico after the Taiwanese government restricted foreign arrivals in the face of an outbreak.
“Even if Team Australia successfully won the event, the timing did not allow the team to complete the quarantine in Australia and qualify for the Tokyo Games.
According to Baseball Australia, the Chinese and Chinese Tapei teams have also withdrawn from Olympic qualification.
Baseball is returning to the Olympics for the first time since Beijing in 2008. Australia won a silver baseball medal at the Athens Olympics in 2004.
Hosts Japan, Israel, Mexico, South Korea and the United States have already qualified for the Tokyo Games baseball event, while the Dominican Republic, Venezuela and the Netherlands will battle it out for last place in the Mexico qualifying tournament, which will take place from Nov. 26 in Puebla.