The 30-year-old told coach Alastair Clarkson and team-mates at a meeting on Monday that he could harm his sides chances of claiming the flag if he played.
"As desperate as I am to play on Saturday, I realised that I couldn't guarantee to Clarko or the team that I could do everything that would be asked of me in a grand final," Guerra said.
"It was a gut-wrenching decision to make and it was difficult to address my team-mates and coaches today, but they know they have a job to do on Saturday and that needs to be their only focus right now."
The defender injured his left hamstring in the last quarter of Hawthorn's Round 23 clash with West Coast just over three weeks ago but was unable to convince selectors he had returned to full fitness.
Despite intensive rehabilitation, the former Saint and Port Adelaide player will miss the chance to add to the flag he won with Hawthorn in 2008.Captain Luke Hodge is expected to return to the side from illness with one unlucky Hawk set to miss out.