Liverpool's No.66 was due to represent his country in their upcoming matches against Czech Republic and Montenegro.
In a statement released England confirmed that despite progress it would be unlikely that Alexander-Arnold would be able to play, so he has returned to Liverpool to continue his rehabilitation.
The top two are guaranteed a spot at the tournament, although England are ensured at least a playoff place having won their UEFA Nations League group.
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Alexander-Arnold has since played against Bayern Munich and Fulham, but was feeling his back problem when he reported for England duty on Monday.
He is the fifth player to withdraw from the squad since it was announced, with Luke Shaw, John Stones, Fabian Delph and Ruben Loftus-Cheek all set to miss out.
Alexander-Arnold's omission leaves Kyle Walker and Kieran Trippier battling it out for the right-back slot.