R S Jaganath Sinivas will take Natarajan's place in the 20-member squad which will leave for Indore on February 13.
Natarajan was earlier included in a 20-man Tamil Nadu squad for the tournament beginning February 20. Tamil Nadu had recently won the Syed Mushtaq Ali Trophy in Ahmedabad.
The first of the five T20 Internationals against England will be played on March 12 in Ahmedabad while the first ODI will take place in Pune on March 23.
The Tamil Nadu chief of selectors S Vasudevan also confirmed the development and said Natarajan has been released from the Vijay Hazare Trophy squad.
Natarajan had become the first Indian cricketer to make his international debut across all three formats during the tour of Australia.
He played in the series-clinching Brisbane Test after making his maiden T20I and ODI appearances earlier on the tour.
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