General manager Brian Lisles told The Associated Press on Friday night the team ran out of time to put together a proper program for the May 27 race.
"We had every intention of being in the race, but simply ran out of time," Lisles said. "We withdrew when it became apparent we could not do it properly."
Newman/Haas was on the official entry list released last week, but the team did not list a driver. The official entry had Newman/Haas paired with engine manufacturer Lotus, which has struggled mightily this season and earlier this week released two of its teams from its contracts.
Lotus now has just three official cars for the 500, compared to 11 for Chevrolet and 10 for Honda.
The withdrawal of Newman/Haas puts the Indy 500 in danger of not having a full 33-car field. Although there were 34 official entrants on the initial list, there were only 30 announced driver-team combinations. Rahal Letterman Lanigan has since announced Michel Jourdain Jr. for its entry.
Michael Shank Racing announced earlier this week it would field a car for Jay Howard, but does not have an engine deal yet. The team has a deadline next week with a sponsor to put together a final package. Shank would now be the 33rd entry. SI.com