The ACB only finalised the series last month after lengthy negotiations.
Two of the matches were to be played under a closed roof at Melbourne's Colonial Stadium on September 21 and 23 after the success of three games against South Africa at the stadium last year.
The third match against India was to be played in Brisbane on September 26.
The ACB said in a statement that it had received advice from the Board of Control for Cricket in India (BCCI) that India were no longer able to take part in the series.
?The president of the BCCI, Dr A.C. Mutiah, confirmed that India can no longer meet its commitments to the three-match tour after holding recent discussions with the Indian players and hearing their concerns about the team's heavy workload,? the ACB said.
ACB chief executive James Sutherland said: ?Although we are disappointed at India's final decision, I would hope that the ACB can continue to work with the BCCI to identify a suitable time in the future for India to come and take part in this series.?
Australia's captain Steve Waugh had expressed reservations about the tournament, particularly because the wives of three players - himself, Glenn McGrath and Shane Warne - were expecting babies around the time of the series.
Australia are currently on a five-Test Ashes tour of England. The trip ends in late August.
Australia will host New Zealand for a three-test series starting in November, followed by a three-Test series against South Africa and a triangular one-day tournament.
REUTERS
India have withdrawn from a three-match, one-day cricket series against world champions Australia scheduled for September, the Australian Cricket Board (ACB) said on Thursday.
