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Westbrook had been part of gold-medal-winning teams in 2010 and '12 in the world championships and Olympics, respectively, and has been a favorite of national coach Mike Krzyzewski.
Westbrook, 25, still has hopes of playing in the 2016 Olympic Games in Brazil, sources said.
Westbrook's decision leaves the opportunity for Golden State's Stephen Curry to compete for a roster spot with Cleveland's Kyrie Irving and Portland's Damian Lillard. Chicago's Derrick Rose is still deciding whether he'll play for USA Basketball this summer.
After a season that included his third surgery on his right knee, Westbrook decided to pass on the two-month commitment that includes a July training camp, August exhibition tour and September tournament in Spain.