Williams, a seven-time grand slam winner, has been troubled by the problem since July when she was knocked out of the quarter-finals at Wimbledon.
The world number three has not played since last month's U.S. Open, where she lost in the semi-finals to the eventual champion Kim Clijsters.
She was to due to play this week's China Open but withdrew because of her knee problems, raising doubts about her chances of playing in the Fed Cup final and the WTA Championships.
"I am very disappointed to announce that I will be unable to play in the season-ending WTA Championships and Fed Cup Final," she said in a statement on Wednesday.
"I have been getting treatment and therapy on my knee and have been making progress but unfortunately must continue to keep weight off my knee for the short term and won't be ready to return to competition in 2010."
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