Haddin had surgery on the ring finger of his left hand on his return from England last week after breaking the digit prior to the third Edgbaston Ashes Test.
Cricket Australia (CA) has made a request to the International Cricket Council for Tasmanian wicketkeeper Tim Paine to replace Haddin in Australia's 15-man Champions Trophy squad.
CA doctor Trefor James said Haddin had not sufficiently recovered to play in the ICC tournament.
"After discussion with Brad's surgeon and the Cricket Australia medical staff it is clear Brad will not have recovered sufficiently for him to be considered for any part of the ICC Champions Trophy in South Africa," James said in a statement.
"While the surgery was a success and there have been no complications, the timeframe for recovery is not sufficient and therefore he can not be considered for selection."
Haddin said he was now aiming to be available for selection in the One-day series in India next month.
"While it is extremely disappointing to miss the ICC Champions Trophy, the good news is that the surgery was successful and my finger will be 100 percent when the recovery period is finalised," Haddin said.
"I am aiming to be available for selection for the One-day series in India however this is a decision that will be made in consultation with the Cricket Australia medical staff when the time arises.
"In the past I have been able to recover from finger injuries and surgery very quickly and I am hopeful this will again be the case."
The Champions Trophy begins in South Africa on September 22.
