Cricket Australia (CA) today said that Faulkner has injured his right knee and will undergo arthroscopic surgery in Melbourne later Tuesday.
He will be replaced in the touring Test squad by New South Wales all-rounder Moises Henriques, while South Australian Kane Richardson has been drafted in to take his place in Australia's squad for the T20 Internationals against England, beginning in Hobart tomorrow night (29 January).
Commenting on Faulkner's injury, Australia Physiotherapist Alex Kountouris said: "James injured his knee during the Australia Day one-day international in Adelaide. He has had subsequent scans and was reviewed by Cricket Australia's medical team and a knee specialist, and will require arthroscopic surgery on Tuesday.
"James' exact rehab plan and return to training and playing will be determined after surgery but unfortunately for him, he will not be available for the upcoming Test tour of South Africa. We are hopeful that he will recover in time to play the Twenty 20 games on that tour and take part in the ICC World Twenty20."
Meanwhile, CA has also said that Test squad batsman Shaun Marsh has a calf strain and will not travel to South Africa as scheduled tonight.
He will remain in Perth for further treatment over the coming days. A decision on whether he will travel to South Africa will be made in due course.
Test squad paceman Jackson Bird will also remain in Hobart to be assessed by CA's medical staff and return to bowling to determine if he has recovered sufficiently enough to take his place on the South Africa tour.
Henriques will play the first T20 International against England in Hobart on Wednesday night before departing for South Africa on Friday.