The Spaniard, who withdrew from the Tour during Sunday's ninth stage, told a news conference in Madrid that his goal now was to get ready for the Vuelta a Espana which starts on Aug 20.
The men's Olympic road race will be held on Aug. 6, almost four weeks after he sustained his injuries in two crashes in the first two stages of the Tour.
"After what Dr Leyes told me, the Olympics are discarded, because it's not a matter of going there, but to reach them in optimal condition and it looks like it will not be possible," Contador said.
"Now my goal is to recover for the Vuelta a Espana, which I think is possible. What I need now is to rest and recover."
Contador rued missing out on a rare Olympic road race which is ideally suited to climbers.
"It's a blow to my moral, because it was my second big goal of the year, after the Tour," he said. "This year the route is atypical, suitable for climbers, and I could have done a good race, but things are as they come."