The 67-year-old made the decision after being injured during training for the competition.
He said on Instagram: "Took a nasty fall on the ice last Friday during rehearsals and sadly broke my left wrist. Absolutely devastated to hear that I can't go on back on the ice for a while.
"Really enjoyed every single moment of being part of the terrific show and working with all the incredibly talented people involved."
ITV has confirmed Mr Barrymore has had to withdraw from Dancing On Ice, and said he will be replaced by former Blue Peter presenter Radzi Chinyanganya.
Mr Barrymore will still appear in the TV programme Dancing On Ice at Christmas which airs on Sunday at 7pm, as it was filmed last week.
He said in an additional statement: "After the fall, I thought I had sprained my wrist but it turns out that it is broken. Unfortunately, the medics have told me that I cannot compete.
"I am absolutely devastated; I have loved every second of the journey so far with my wonderful dance partner Alex Murphy and the support from the public has been overwhelming."
He added he will be in the studio for the first show on Sunday January 5 and hopes to make other appearances throughout.
Mr Chinyanganya said in a statement: "I am thrilled and privileged to be part of the Dancing On Ice 2020 cast.
"I am absolutely gutted for Michael, who is one of my all-time favourite TV presenters, and I wish him a speedy recovery.
"I've only got two weeks to get ready to ice skate in front of the nation so I'm looking forward to a Christmas and New Year filled with training on the ice!"
He will be joined by celebrities including businesswoman Caprice Bourret, TV presenter Trisha Goddard, magician Ben Hanlin, former professional footballer Kevin Kilbane and newsreader Lucrezia Millarini.
Love Island star Maura Higgins, Michael Barrymore and Joe Swash will also compete, with soap actress Lisa George, Scottish Paralympic sprinter Libby Clegg and Diversity star Perri Kiely also taking part.
The 2020 judging panel of Jayne Torvill, Christopher Dean and Ashley Banjo also sees new judge John Barrowman making his debut.