Federer withdraws, Li, Sharapova advance in Madrid
Russian player Maria Sharapova serves against US rival Christina Mchale during their second round match at the Madrid Masters on May 6, 2014 - by Dani Pozo
The 17-time Grand Slam champion's withdrawal comes just two days after world number two Novak Djokovic also decided not to compete in the Spanish capital due to a wrist injury.
"I've decided to withdraw from Madrid to be with my wife Mirka during these next few exciting weeks for our family," he said on his official Facebook page.
"I apologise to my fans and hope to be back in Madrid next year. I'll be training near my home, and am excited to rejoin the Tour soon!"
Federer's withdrawal could benefit Wimbledon champion Andy Murray as the Scot is now the highest seeded player left in the second quarter of the draw.
There is still plenty of star power on show in the women's Madrid Open as Li Na and Maria Sharapova moved into round three with wins on Tuesday.
Sharapova won her first tournament of the season on her return to clay in Stuttgart two weeks ago and looked in fine form as she raced through the first set 6-1.
However, McHale responded well to take the second 6-4 and led 4-1 in the decider.
Sharapova, though, wasn't to be denied by the world number 57 as she reeled off five straight games to set up a meeting with Spain's Garbine Muguruza or 2011 US Open champion Sam Stosur in the last 16.
Earlier, Australian Open champion Li had a more simple task as she swept aside fellow Chinese Zheng Jie 6-2, 6-3.
Zheng led the head-to-head record between the two 4-3 before the match, but Li has now won the last four meetings between the pair in straight sets and will face 16th seed Sloane Stephens in the next round.