The Italian missed the previous San Marino Grand Prix after falling in practice for that race but had been cleared for a return in Spain.
"It's a very hard decision," he told reporters after setting the sixth fastest time of the opening session at the MotorLand Aragon circuit. "I'm not how I would like to be.
"The feeling with the bike was good but doing 23 race laps would be very difficult...I have a lot of pain after three or four consecutive laps."
Ducati said Italian test rider Michele Pirro, who finished seventh at Misano as a stand-in, will also replace him for Sunday's race.
Iannone, who took his maiden MotoGP win in Austria last month for Ducati's first victory in the top category since 2010, is joining Suzuki next season.
(Reporting by Alan Baldwin in London, editing by Ed Osmond)
