The 33-year-old played only one friendly game for France last year, a 1-0 defeat to Nigeria in June, and Domenech said time was running out for him to make France's squad for this year's World Cup in South Africa.
"I've talked to him and we agreed he would not be present," Domenech told reporters.
"He's not back at his best yet. Every player still has two and a half months with plenty of games to play to show he's in good shape and he's able to play for France," he added.
Domenech has repeatedly said Vieira, who moved from Inter Milan to City on loan last month, should play more games at club level to be considered for an international recall. Vieira is serving a three-match ban in England.
Inspirational playmaker Franck Ribery is back after recovering from a niggling knee injury that kept him away from France's controversial World Cup playoff aggregate win against Ireland last November.
Forwards Karim Benzema and Andre-Pierre Gignac are both injured and Everton striker Louis Saha has been recalled more than three years after he earned his last cap in a 1-0 win against Greece in a friendly in November 2006.
"We are going through a very difficult time with many injured players... But on the other hand, it is nice to see new players and try new things with them," Domenech said.
Girondins Bordeaux defender Michael Ciani and Olympique Marseille midfielder Benoit Cheyrou were both picked for the first time.
France host Spain at the Stade de France on March 3.
Squad:
Goalkeepers: Cedric Carrasso (Girondins Bordeaux), Hugo Lloris (Olympique Lyon), Steve Mandanda (Olympique Marseille)
Defenders: Aly Cissokho (Olympique Lyon), Patrice Evra (Manchester United), Julien Escude (Sevilla), Rod Fanni (Stade Rennes), Bacary Sagna (Arsenal), Jean-Alain Boumsong (Olympique Lyon), Michael Ciani (Girondins Bordeaux), Adil Rami (Lille)
Midfielders: Lassana Diarra (Real Madrid), Yoann Gourcuff (Girondins Bordeaux), Moussa Sissoko (Toulouse), Jeremy Toulalan (Olympique Lyon), Benoit Cheyrou (Olympique Marseille)
Forwards: Nicolas Anelka (Chelsea), Sidney Govou (Olympique Lyon), Thierry Henry (Barcelona), Florent Malouda (Chelsea), Loic Remy (Nice), Hatem Ben Arfa (Olympique Marseille), Franck Ribery (Bayern Munich), Louis Saha (Everton)
