The Brighton and Hove Albion striker was placed on the shortlist for the London 2012 squad, but he has informed coach Stuart Pearce that he does not wish to be selected.
The news follows the decision of fellow Scotland internationalist Barry Bannan to rethink his stance on whether to accept a place on Team GB. The Celtic winger James Forrest was also thought to be keen on turning out at the Olympics, but injury has ruled him out of contention.
Those players all received notice that they were being considered for a GB side – which is in Group A alongside Senegal, United Arab Emirates and Uruguay – that will open the men's football competition next month. The final is to be played at Wembley in August.
Bannan had admitted concerns over the reaction of Scotland supporters were he to accept the call from Pearce, with many against the idea of Scots taking part in the competition.
However, Mackail-Smith admitted that he was more concerned about ensuring he is in top condition ahead of the national side's World Cup qualifying campaign, which begins with a match against Serbia at Hampden on September 8.
With his form having dipped following a taxing play-off campaign last season – the striker scored 35 times as Peterborough United gained promotion to the npower Championship, only to score 10 times for Brighton this term – Mackail-Smith is acutely aware of the debilitating effect a lack of rest over the summer months can have on a player.
"I was involved in the play-offs last season so didn't have much time to rest then, and it has been a long, hard season this time," said the striker, who is part of the Scotland squad that has travelled to face the United States in an international friendly tomorrow.
"The ramifications were that I could have been tired for next season, I could have got injuries and it could have caused a lot of problems. There are so many games in every league you play in and you have to make sure you are prepared to perform well.
"I was put on to the shortlist and was sent an email regarding it but I feel that I want to play for Scotland. That's more important to me than going and playing for GB. I want to make sure that we have a successful campaign and go to the World Cup, I don't want to jeopardise that by going off with the GB squad.
"I sent them an email just saying 'thanks very much but this is more important'. I want to make sure that I'm just ready for the qualifiers."
The striker acknowledged the discontent the emergence of a Team GB has generated among Scotland fans but stressed that had not played a part in his decision to knock back the opportunity to play at the Olympics.
"I don't know how it would have gone down; I just wanted to do what was right for me and keep doing what I was doing for the national team," he said. "I did hear that they [the fans] were against it but it's not something that I was worrying about, it was my decision. I talked to people like my dad and I just felt that it is a great opportunity to play for my national team, and it's the pinnacle for a footballer to play in the World Cup so that's what I want to do."
Similarly, the stance held by the SFA, who have voiced concerns about their players heading to London, was afforded only a minor role in his decision. The 28-year-old did hold discussions with the governing body but was ultimately left to choose to reject Team GB on his own.
"They had a chat with me but it was my decision and they didn't put any pressure on me," he said.
"They just said 'this is the situation' and it was up to me, this is the decision I chose. It was a quick decision; this is where I want to be. I want to keep be involved and be part of a successful campaign to get to the World Cup.
"I think it is good to get the boys together here, get bonding as a squad again. The boys were getting stronger and stronger as the campaign finished for the Euros, and the gaffer is bringing in the same squad of players together.
"This is another good game for the boys to compete against another good country and we'll see what we need to work on for the World Cup qualifiers coming up."