The unbeaten Cromer star, 26, was due to face Burns on Saturday 15th December at the ExCeL London, but after receiving expert medical advice he has been told to rest and not resume training for four weeks.
Burns, from Coatbridge in Scotland, will still headline Frank Warren's big multi-title show with the third defence of his title against a new challenger to be announced shortly.
An action-packed show features Commonwealth Super-Middleweight Champion George Groves defending his title against the Road Warrior Glen Johnson in an exciting chief supporting contest, and big-punching Billy Joe Saunders defends his Commonwealth Middleweight title against Nick Blackwell with the Vacant British title also on the line.
Walsh, who holds the Commonwealth and WBO European titles, said, "I'm devastated at the moment that I’m not going to be challenging Burns for the world title.
"I have followed the advice of the doctors and withdrawn from the fight. The doctors have said hopefully I'll be able to resume training in four weeks. To fight for the world is my dream and this is just a set back and hope that I can get the opportunity to fight Burns again. I wish Burns all the best in his title defence and all the other lads on the show.”