The singer has been unable to reach a deal which balanced her musical commitments with the "increasing demands" of the show.
Insiders from the Simon Cowell show have already indicated talks have begun with former judge Dannii Minogue about a return.
There had been doubts about Rowland's continued presence in the ITV1 series.
A statement issued on behalf of the former Destiny's Child star said she had "decided not to return" as a judge.
"Global commitments coupled with the show's increasing demands this year mean that, despite weeks of deliberation with the show, Kelly has not been able to agree a deal that fits into her autumn/winter schedule, so sadly cannot accept a place on the 2012 panel," the statement said.
The singer added: "I loved the UK and being part of the show. Mentoring the girls was such an incredible experience. I would like to thank Simon for the great opportunity."