Zhao, who beat Luca Brecel to win the 2021 UK Championship title, was suspended on Tuesday along with Zhang Jiankang, taking the number of Chinese players currently barred from the tour to 10.
The 25-year-old could conceivably have appealed against his suspension and played in the prestigious top-16 tournament whilst that appeal was heard, but in a short statement, World Snooker Tour confirmed he has elected not to do so.
Zhao's place in the draw has been taken by Iran's Hossein Vafaei, who will make his debut in the tournament when he faces Mark Selby in the opening round on Sunday.
Yan Bingtao, the former Masters champion, was suspended from the tour in December and forced to give up his own place in the draw as a result.
World number 56 Liang Wenbo was the first player to be suspended as part of the investigation in October, with Lu Ning, Li Hang, Zhao Jianbo, Bai Langning, Chang Bingyu and Chen Zifan suspended along with Bingtao last month.