The Dortmund defender, who has been struggling to shake off injury concerns, is the only surprise exclusion from Joachim Low's final 23-man roster for Brazil.
The Borussia Dortmund defender had been struggling with groin and knee problems and was left out of the 2-2 friendly draw with Cameroon on Sunday.
Schmelzer has been unable to convince Low of his fitness prior to Germany's campaign, which begins at the end of next week, and he has therefore been omitted from the final squad, along with striker Kevin Volland and fellow defender Shkodran Mustafi.
Miroslav Klose, who has himself been battling to prove his fitness, is the only recognized out-and-out striker in Low's plans, while midfielder Bastian Schweinsteiger — another who has been blighted by injury problems — is also included.
Low revealed he was proud of the efforts of all his players during the training camp and said the decision to leave three out of his plans was "extremely difficult."
"I was amazed at how all the player presented themselves in Tyrol," he said. "Each individual worked excellently. The players did what I hoped for and made the decision incredibly difficult. Shkodran, Kevin and Marcel are very disappointed.
"Hans Flick and I told the players in a personal interview. All three players have the chance to play in some big tournaments in their careers. I am 100 percent convinced of all the players, we have the right mix of young and talented footballers and players with tournament experience. With this squad, we fly to Brazil with confidence, where he have big goals."
SQUAD IN FULL:
Goalkeepers : Manuel Neuer (Bayern Munich), Roman Weidenfeller (Borussia Dortmund), Ron-Robert Zieler (Hannover)Defenders: Jerome Boateng (Bayern Munich), Erik Durm, Kevin Grosskreutz (Borussia Dortmund), Benedikt Hoewedes (Schalke 04), Mats Hummels (Borussia Dortmund), Philipp Lahm (Bayern Munich), Per Mertesacker (Arsenal)
Midfielders: Julian Draxler (Schalke 04), Matthias Ginter (Freiburg), Mario Gotze (Bayern Munich), Christoph Kramer (Borussia Monchengladbach), Sami Khedira (Real Madrid), Toni Kroos (Bayern Munich), Mesut Ozil (Arsenal), Marco Reus (Borussia Dortmund), Andre Schurrle (Chelsea), Bastian Schweinsteiger (Bayern Munich)
Forwards: Miroslav Klose (Lazio), Thomas Muller (Bayern Munich), Lukas Podolski (Arsenal)