Vettori has not made a Test appearance for nearly a year but did make his comeback from a two-and-a-half-year absence from one-day internationals in the recent Champions Trophy.
After the tournament in England the 34-year-old underwent an operation on his Achilles and has told New Zealand Cricket (NZC) and the Northern Knights he will re-evaluate his situation once his rehabilitation is complete.
“I am very focused on my recovery from my recent surgery and will be working hard to get back onto the playing field over the next six-month period,” Vettori said in a statement released by NZC.
“However, I feel that with my present injury situation it would be wrong for me to take a retainer contract.
“Given the time I’ll need to spend out of the game with my recovery, and the level of uncertainty about when I may play again, it doesn’t feel right that I take up a retainer contract this year.
“I will now focus on my rehabilitation in the coming months, with the overall goal of making a return to the cricket field during the summer months. Hopefully, it goes well.”
NZC chief executive David White said: “In the ICC Champions Trophy Dan showed the immense value that he still brings to the Black Caps side.
“Unfortunately Dan has indicated he’s in a position where he feels uncomfortable taking a contract this season, as he builds towards making a return to the cricket field.
“As always, Dan has made his decision in the best interests of New Zealand Cricket and we appreciate his honesty and up-front approach.
“There’s no doubting Dan’s hunger to continue competing, and we hope to see him back playing for the Black Caps again when the time is right.”