Australian Sevens coach Andy Friend said the team had not had enough time to work with the flyhalf, who plays for French Top 14 side Toulon.
“There's no doubt Quade is a quality player, but put simply, we just haven't had the opportunity to work with him as much as we would have liked over the past five months,” said Friend.
“Each day I have a group of 20-plus players working on different structures and patterns of play and I don't think we would have got the very best out of Quade had we just thrown him into a tournament with limited preparation - particularly for an event as momentous as the Olympics.
“Although we are still a few months out from the Games, I think it offers the fairest outcome for everyone by making the call now,” continued Friend.
“Quade can channel his energies into Toulon while we can enter the next phase of our preparations for Rio knowing the direction we want to take.”
Cooper, 28, has 58 caps for the Wallabies and participated in the 2015-16 World Rugby Sevens Series in Las Vegas and Vancouver.
Although he has failed to impress since joining Toulon last year, Cooper will now be able to focus on the Top 14 side's bid for the French title.
With Sevens Rugby set to make its debut at the Olympics, the Australians travel to Europe on Friday ahead of the ninth leg of the 2015-16 World Rugby Sevens Series in Paris.
Australia are currently fourth in the World Series standings. – AFP
Original source: Quade Cooper’s Olympic dreams dashed