Turkey has said it is joining Albania and Kosovo in boycotting the Nobel awards ceremony to protest the academy's choice of Austrian Handke for the prize.
"Giving the Nobel Literature Prize to a racist, who denies the genocide in Bosnia and defends war criminals, on December 10, Human Rights Day, will have no meaning other than the rewarding of human rights violations," Erdogan said.
The academy's choice has been widely criticized.
Handke, now 77, expressed support for Milosevic and spoke at the funeral of the former Serbian president in 2006 after he died in detention during his trial at the U.N. war crimes tribunal.
Milosevic was charged with war crimes in connection with atrocities and ethnic cleansing committed by Serb forces in Bosnia, Croatia and Kosovo during the 1990s wars triggered by the disintegration of federal Yugoslavia.
On Friday, Handke dismissed questions about his support for Milosevic. On Tuesday, he will formally be handed the 9 million crown ($935,000) award and later attend the traditional Nobel banquet.
Handke is the author of books such as "The Goalie's Anxiety at the Penalty Kick" and "Slow Homecoming." He also co-wrote the script of the critically acclaimed 1987 film "Wings of Desire."