"Being on the court this season has been my top priority and it is disappointing to not be able to do that right now," Nash said in a statement released by the team. "I work very hard to stay healthy and unfortunately my recent setback makes performing at full capacity difficult. I will continue to support my team during this period of rest, and will focus on my long-term health."
Nash, who at 40 is the NBA's oldest active player, hadn't practiced with the team since leaving an Oct. 12 exhibition game.
"As disappointed as we are for ourselves and our fans, we're even more disappointed for Steve," Lakers general manager Mitch Kupchak said in a statement. "We know how hard he's worked the last two years to try to get his body right for the rigors of the NBA, and how badly he wants to play, but unfortunately he simply hasn't been able to get there up to this point in time. Steve has been a consummate professional, and we greatly appreciate his efforts."
Because of back, knee and hamstring issues, Nash played in just 65 of a possible 164 regular-season games the past two seasons with the Lakers. Nash tweaked his back earlier this month while carrying bags.
Nash decided not to retire this offseason and instead returned to the Lakers, who will pay him about $9.7 million in the final year of a three-year, $28 million deal. Nash also said this summer that he believes this season -- his 19th -- will be his last.
Information from ESPN.com's Lakers reporter Baxter Holmes contributed to this report.