Federer claimed a 6-7 (5), 6-4, 6-3 victory over Juan Martin del Potro at the Swiss Indoors final in Basel on Sunday and afterwards withdrew from the tournament in Paris as he looks to get back to full fitness after an injury-hit season.
Nadal, currently tops the rankings and both will now likely battle it out at the ATP finals at the end of the season event.
"I'm very disappointed to announce that I won't be playing Paris," Federer told ATP World Tour. "I feel bad for all my friends and fans in Paris. I love playing there. It is one of my favourite places to play to be honest. Bercy or Rolland Garros. Now it is the fourth time in a row that am missing either one of those tournaments.
"My body needs healing. I need to be careful I don't make the same mistake like last year, just over playing it at the end. Nobody wins. I get hurt or I don't play at all anymore next season. I really would like to stay healthy from here going forward."
He added: "I need to play a reduced schedule if I am going to be successful because I do feel that the miles are on my body after all these hundreds and thousands of matches that I have played."