The BCCI named Sehwag's Delhi teammate Dinesh Karthik as his replacement in India's 15-member squad. Karthik is expected to arrive in London ahead of India's first Super Eights match against the West Indies at Lord's on Friday.
Sehwag had sustained the injury during the Indian Premier League and missed both the warm-up matches and the game against Bangladesh.
In other words, the hard-hitting opener would return home without playing a single match in the tournament.
"Viru is one of our main batsmen, so not having him around is a blow. We need to work around his absence," said coach Gary Kirsten.
Earlier in the day, Sehwag did come to the nets and batted for only 12 balls before retiring to the dressing room, complaining about his recurrent pain in the right shoulder to captain Mahendra Singh Dhoni and coach Gary Kirsten.
Sehwag may need a surgery to his injured shoulder and will return home after consulting medical experts here, the BCCI said.
Incidentally, Sehwag's absence in the warm-up matches lead to media speculation about a possible rift between Sehwag and his captain Mahendra Singh Dhoni.
It prompted Dhoni to turn up at a press conference with the entire squad, including Sehwag, and read out a statement dismissing those reports.
Even though Sehwag didn't play, India did not really miss him so far in the tournament because Rohit Sharma did an excellent job in the makeshift opener's role.
Rohit in fact went on to outshine his opening partner Gautam Gambhir in all three matches so far.
Even though India lost the first practice match to New Zealand, Rohit scored a quickfire 36 off just 23 balls to make his mark.
In the warm-up match against Pakistan, Rohit simply went ballistic and hammered a 53-ball 80 that took the game away from Younis Khan and his men.
In India's first match against Bangladesh too, Rohit scored a brisk 36, giving India the perfect start.
India play their next match against Ireland here tomorrow.