In Dhoni's absence, Virat Kohli will lead the side. Dinesh Karthik will take Dhoni's place in the squad.
"MS Dhoni has been ruled out of the forthcoming Asia Cup, to be played in Bangladesh, in February-March 2014," BCCI secretary Sanjay Patel said in a media release on Thursday.
"He sustained a Grade I left side-strain injury during the course of the second Test against New Zealand. He will be undergoing rehabilitation for ten days," he added.
"The All-India Senior Selection Committee has picked Dinesh Kartik as his replacement in the Indian squad for the tournament. Virat Kohli will lead India in the competition," the release stated.
Asia Cup will be played in Bangladesh from February 25.