Michael Cheika's team have already ensured they will finish top qualifier in the regular season and have earned a bye into the semi-finals and home advantage throughout the playoffs.
Cam Crawford will replace Folau at fullback.
Local media reported the 25-year-old Folau, the competition's leading try scorer (12) this season, ran freely at training on Thursday and was expected to be fit for the Waratahs' home semi-final in two weeks.
His absence from what could be a bruising encounter between the bitter rivals at Lang Park will ensure the Waratahs enter the playoffs with their most prized attacking asset free from injury.
Massive Wallabies lock Will Skelton has been restored to the starting lineup for the Waratahs, with South African Jacques Potgieter moving to the bench.
Skelton's return and Folau's injury are the only two changes from the starting side that hammered the Otago Highlanders 44-16 last week in Sydney.
The Waratahs have built their success on a physically intimidating pack and exciting backline and will be keen to ensure they end their regular season on a high against a Reds team that have underperformed.
Queensland are in 12th place on 28 points and out of playoffs contention.
(Reporting by Greg Stutchbury in Wellington; Editing by John O'Brien)
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