Jones, who took over from Read after the Nottinghamshire gloveman was himself axed for the final Test against West Indies in Antigua two years ago, had played 31 consecutive Test matches and was known to be a firm favourite of coach Duncan Fletcher.
But a run of just one fifty in his last 15 Test innings was too much for the selectors, who initially opted for the Kent gloveman over Read on account of his superior batting, to ignore and they have decided to give Jones a spell on the sidelines.
Jones sustained a right ring finger injury while batting during England's innings and 120-run second Test victory at Old Trafford.
But David Graveney, England's chairman of selectors, made it clear that Jones had been dropped on form alone.
"We have taken this decision regardless of the injury to Geraint's finger," he said on Monday.
"The key factor for the selectors was his form with the bat and we believe he will benefit from having a break from international cricket and spending more time in the middle with his county."
In another change to the Old Trafford squad, where England's win inside three days put them 1-0 up in the four-match series after the drawn opener at Lord's, uncapped off-spinning all-rounder Jamie Dalrymple was omitted.
And pace bowler Liam Plunkett was still recovering from the side strain that forced him out of the second Test.
Gloucestershire seamer Jon Lewis, who didn't play in Manchester, was retained in a 12-man squad.
Marcus Trescothick (Somerset), Andrew Strauss (Middlesex, capt), Alastair Cook (Essex), Kevin Pietersen (Hampshire), Paul Collingwood (Durham), Ian Bell (Warwickshire), Chris Read (Nottinghamshire, wkt), Sajid Mahmood (Lancashire), Matthew Hoggard (Yorkshire), Stephen Harmison (Durham), Monty Panesar (Northamptonshire), Jon Lewis (Gloucestershire)