A Football Association statement read: "Trent Alexander-Arnold has been ruled out of UEFA EURO 2020. The Liverpool player sustained a thigh injury in the closing stages of Wednesday's 1-0 win against Austria in Middlesbrough.
"A scan on Thursday confirmed the 22-year-old will be unable to play in the forthcoming tournament so has withdrawn from the England squad to return to his club for rehabilitation.
"Gareth Southgate will not confirm a replacement until after Sunday's return to the Riverside Stadium for the warm-up fixture against Romania."
It is believed he has suffered a muscle tear that will rule him out for between four and six weeks. The front-runners to replace Alexander-Arnold from the six-man standby list are thought to be James Ward-Prowse and Jesse Lingard.
The news comes as a bitter blow for Alexander-Arnold, whose place in the final 26-man squad had looked in jeopardy after being dropped for England's matches in March before making the cut as one of four right-backs.
Alexander-Arnold hobbled off as the game entered stoppage time, breaking down following an innocuous-looking incident in which he cleared the ball upfield with his left foot.