The 26-year-old Brumbies lock will partner Rob Simmons, veteran of 80 internationals, in the Wallaby engine room for the second game of their three-test British tour.
Coleman had been named in the Wallabies’ lineup by coach Michael Cheika on Thursday.
Cheika, however, said Coleman had been struggling in training with the injury, picked up in last weekend’s 29-21 victory over Wales in Cardiff.
He failed a fitness test on Friday morning.
Cheika has also finalised his replacements with the Wallabies opting for a six-two split (six forwards, two backs) on the bench.
It means Lopeti Timani comes into the matchday squad with Henry Speight dropping off the extended bench that was named on Thursday.
Third-ranked Australia are seeking to end a run of four successive defeats against England, who are one place above them in the World Rugby rankings.
(Reporting by Mark Gleeson; Editing by Toby Davis)
