The Manxman, who broke his collarbone in a crash at the Amgen Tour of California in May, says his decision to step down was based on his lack of fitness after that injury.
“I did everything I possibly could to be in shape for the Rio Olympic Games with the time I had after breaking my collarbone at the Tour of California in May,” Kennaugh said in a statement.
“Unfortunately I just didn’t feel at the level needed to compete at the Olympics and I didn’t want to be on the start line at 70 per cent as it wouldn’t be fair on the team or myself, especially when you have other guys who are in the form of their lives and it’s about having the best five guys there on the day. I wish all my team mates good luck on both road and track at Rio.
“I still have plenty of other goals for the rest of the season and am really motivated to get some more results before the season is over. My next races will be San Sebastián on July 30 and then Vuelta a Burgos starting on August 2.”
Kennaugh won gold on the track at London 2012, riding the team pursuit alongside Geraint Thomas, Ed Clancy and Steven Burke.
Cummings will replace Kennaugh in the Olympic road race on August 6 and could be a reserve for the time trial four days later if Chris Froome is unable to ride.