Lyle, who twice has beaten leukemia, said in a statement to the Australian Associated Press, "As the year progressed, it has become increasingly obvious that I am simply not in a position to compete on the PGA Tour.
"My goal every single week out here, just like the rest of the field, is to play my best and to be competitive.
"Unfortunately I haven't been in real contention in any of the 10 events I have played so far this season.
"At the moment, I am out here making up the numbers."
Lyle, whose fight with cancer was documented in an award-winning series by GolfChannel.com's Rex Hoggard, stressed that his decision has nothing to do with his health. "I am still healthy and cancer-free," he said.
Lyle, 33, has played 10 events, making only three cuts, and earning $66,145. His best finish came in his first event, the Frys.com Open, where he finished T-31. He made the cut this past weekend at Colonial, but did not make the secondary cut.