"The horse was inspected by RV veterinarians upon request of the stable and was found to be lame in its off fore leg," Racing Victoria (RV) stewards said in a statement.
The two-mile handicap starts at 3 p.m. local time (0400 GMT) at a closed Flemington Racecourse.
Local trainer O'Brien still has three runners, including last year's winner Vow and Declare, Russian Camelot and Miami Bound.
Aidan O'Brien-trained Tiger Moth was an 11-2 favourite among bookmakers to win "the race that stops the nation".
($1 = 1.4178 Australian dollars) (Reporting by Ian Ransom; Editing by Richard Pullin)