The Arsenal forward started his first game of the tournament in the Group G clash with the United States on Thursday, but was substituted at half-time after suffering a pulled muscle.
And Germany coach Joachim Low has revealed that the former Bayern Munich man will play no part against Algeria in Porto Alegre.
He said on Saturday: "Podolski will be missing in the last 16. He's pulled a muscle. He needs two or three days of rest."
There was more positive news of defender Jerome Boateng, who trained on his own on Saturday but is set to feature at Estadio Beira-Rio.
Low added: "(Boateng) has got a little niggle in his knee, but it won't rule him out out."
Germany will be expected to be too strong for Algeria, but Low knows they can ill afford to be complacent.
He said: "We've delivered so far. We're essentially happy, but we know that we can play better.
"Knockout games have a magic about them. We'll be full of confidence, but it would be a big mistake to think it will be easy."
