The German team said Westermann had fractured a bone in his foot at the end of Saturday's 3-0 win over Hungary.
The Schalke 04 player, who has won 19 caps, is a defender but could have provided cover in midfield following the injuries to Michael Ballack and Christian Traesch - who have both been ruled out.
"Naturally I am devastated because it was my big goal to take part in the World Cup," said Westermann. "I felt fully fit but now the only thing left for me to do is to wish the team all the best at the tournament."
Germany coach Joachim Low, who now has only 24 fit players left from his preliminary 27-man squad, said Westermann's versatility would have been needed in South Africa,
"Heiko would have played a very important role at the world Cup for our team. That is because of his multi-faceted play. In training he was in superb physical condition," Low said.
Stefan Kiessling, the Bundesliga's second best scorer, was left on the bench against Hungary, with Miroslav Klose and Lukas Podolski guaranteed a spot on the World Cup team despite a slump in form.
