The decision came after Luck went to visit with doctors earlier this week to ask why he was still having soreness in his right shoulder. It also ends months of speculation about whether the quarterback would play this season after having surgery in January.
"The one thing I want y'all to understand is that there's never been once a time where I've tried to mislead, [when] this organization has tried to mislead," Ballard said. "This whole thing has been very fluid."
Luck told the team's website that he is optimistic about his future.
"I wish I was better and 100 percent this season, but that's not the case," Luck said. "I know I'll be better from this. I know I'll be a better quarterback, teammate, person and player from this, and I'm excited for the future."
"I've heard all sorts of rumors about 'career-ending.' That's not the case here. I've not got that from one doctor. Career-ending is putting him out on the field before he's ready to play. That's where you should be concerned."Colts GM Chris Ballard
Luck practiced on Oct. 4 for the first of two times since December 2016. Then he practiced two more times before he was shut down and given a cortisone shot to see if the soreness would subside.
"The consensus from all the doctors is to continue rehab, to be patient and continue rehab," Ballard said. "The shoulder is subjective and after a surgery everybody's different, everybody rehabs at a different way. So we're going to shut his throwing down and we're going to continue to rehab. We're going to continue hard rehab.
"We think for the long-term interest of Andrew this is the best course of action. I've heard all sorts of rumors about 'career-ending.' That's not the case here. I've not got that from one doctor. Career-ending is putting him out on the field before he's ready to play. That's where you should be concerned."
Ballard, as he has consistently said since April, will not put a timetable on Luck's return. That means there's no guarantee the quarterback will take part in offseason workouts in the spring. Luck will continue his rehabilitation at different places and they will take "a little different approach and do some different strength and recovery efforts to try to get the soreness out."
Injuries have derailed what was a positive start to Luck's career. The Colts selected him with the No. 1 overall pick in 2012 and he started every game during his first three seasons. The Colts went to the playoffs, including the AFC Championship Game in 2014, in each of those seasons.
Luck originally injured his shoulder during the 2015 season in Week 3 at Tennessee. He missed two games due to his shoulder and then missed the final seven games of that season due to a lacerated kidney. Luck missed a game last season with a concussion and all of this season with the shoulder.
Despite dealing with the shoulder injury that caused him to miss practice at times last season, Luck threw for 4,240 yards and 31 touchdowns while completing a career-high 63.5 percent of his passes.
The Colts missed the playoffs in 2015 and 2016 and will likely miss them again this season. They're currently 2-6.
"It's unfortunate that we've come to this point," coach Chuck Pagano said in a video posted on the Colts' Twitter account. "Andrew is frustrated. Andrew wants to be out there. Andrew wants to be fighting with his teammates. He's a great warrior, he's a great competitor and he's a great player, one of the best in this league. He'll be back. He's going to get right. This is the right thing to do for him and the right thing to do for the organization. He'll be back."
The Colts tried to sign Eagles quarterback Nate Sudfeld off the practice squad, but Philadelphia promoted him to its 53-man roster Wednesday to avoid losing him, a league source told ESPN's Tim McManus.
Jacoby Brissett has been starting at quarterback in Luck's absence. Brissett, who was acquired from the New England Patriots before the start of the season, has completed 60.4 percent of his pass attempts (145 of 240) for 1,642 yards with five touchdowns and four interceptions. He also has rushed for three touchdowns this season.