Bennett has been battling a knee injury sustained in training and was expected to be fit before Stage 1 of the race in Brest on Saturday (AEST), but was unable to respond to treatment in time.
Beating out the likes of Peter Sagan (BORA-Hansgrohe) and Caleb Ewan (Lotto-Soudal) for the sprinter's jersey last year had the Irishman among the favourites to challenge again in 2021, but he revealed he felt his condition was not up to par so close to the start.
"Needless to say, I’m very disappointed to not be able to defend my green jersey at this year’s Tour de France," Bennett said in a press release.
"I had a very minor incident during training a couple of weeks ago, which affected my knee. While the injury I sustained is very short-term, it impacted my training for the biggest bike race in the world all too much and left me without enough time to be race fit.
"Le Tour deserves me at my best and it would do my team, and myself, an injustice to race in my current condition. I wish the whole Wolfpack a successful three weeks on the road of France."
Optimism on Bennett's status meant team boss Patrick Lefevere had earlier ruled out an appearance from Cavendish at the Tour, where the Brit currently sits second on the all-time stage wins list with 30.
Now 36-years-old, Cavendish was on the verge of retirement before coming back into the fold with Deceuninck and has rediscovered his form with five wins for the team so far and returns to the French grand tour for the first time since 2018.
"I am delighted to be going back to the Tour de France with Deceuninck-QuickStep," Cavendish said.
"Obviously, the circumstances with Sam could be better – he had a special Tour last year and I am sad for him not being able to defend his green jersey.
"But at the same time, I am excited to be going back to a race that I have such an affinity with and where I have so much history.
"It is the biggest bike race in the world, and I am going to do all I can to grab this opportunity with both hands."
Lefevere was frank when asked about the decision to keep Bennett out, questioning the severity of the Irishman's injury.
"I can't prove he doesn't have knee pain, but I'm starting to think more and more that it's more fear of failure than just pain," Lefevere told Belgian outlet Sporza.
He also addressed the incident when speaking to Het Laatste Nieuws as he revealed, ""We thought Bennett was on the right track. Then it turns out that he has told us anything but the truth. He said three different things to three different people on the squad. That's not the way it's played.
"Bennett was supposed to fly to Belgium on Sunday evening. First, we were told his flight was delayed.
"That turned out to be the case. Then there was talk of overbooking. And then it is precisely Bennett who no longer gets a seat on the plane? I am not suspicious by nature, but then I start to ask myself questions.
"Behind our backs, he turns out to have gone to a physiotherapist in Monaco, who said he could train better. Some kind of miracle man, you know that.
"It's a shame that a 30-year-old guy doesn't dare to tell the truth. With the exception of Julian Alaphilippe, we had built the whole squad around him. So Cavendish takes his place."
Every moment of the 2021 Tour de France will be live on SBS, with the ŠKODA Tour Tracker app, SBS TV and the SBS Cycling Central the place to be to catch all the pulsating action from France from June 26 to July 18.