Coach Joachim Loew also cut 20-year-old midfielder Julian Brandt along with his Bayer Leverkusen team mate Karim Bellarabi and defensive midfielder Sebastian Rudy.
Borussia Dortmund's Reus, who was ruled out of the 2014 World Cup after sustaining an injury in the final warmup game, would struggle to get through a one-month tournament due to long-standing fitness problems, Loew said.
The 27-year-old, considered among the most talented German players of his generation, had another injury-plagued season with Dortmund and went into the German training camp nursing an adductor muscle injury.
"The medical staff could not give a clear prognosis for Marco," Loew told reporters.
"He has massive injury problems and the medical staff was very sceptical about his ability to last through the coming weeks and such a gruelling tournament.
"It is a bitter decision and bitter for Marco," he said.
Reus struggled throughout the season with muscle problems as well as a toe injury among other issues.
"He can barely run straight at the moment and you have to be fully fit if you play in a European championship," team mate Sami Khedira said.
"It is very bitter but I am confident he will get his chance on the big stage.
"He was very calm and composed in accepting the decision," Khedira added.
The Germans, eyeing their fourth continental title and first since 1996, have been drawn in Group C along with Poland, Ukraine and Northern Ireland for the tournament in France starting on June 10.
Loew kept faith with youngsters Leroy Sane, Julian Weigl and Joshua Kimmich and included captain Bastian Schweinsteiger and defender Mats Hummels even though both are nursing injuries.
"Both will be ready for the Euro," Loew said.
Germany lost 3-1 to Slovakia in a friendly last weekend and play Hungary on Sunday in their final warm-up game.
Full squad:
Goalkeepers: Manuel Neuer (Bayern Munich), Bernd Leno (Bayer Leverkusen), Marc-Andre ter Stegen (Barcelona)
Defenders: Jerome Boateng (Bayern Munich), Emre Can (Liverpool), Jonas Hector (Cologne), Benedikt Hoewedes (Schalke 04), Mats Hummels (Borussia Dortmund), Shkodran Mustafi (Valencia), Antonio Ruediger (Roma)
Midfielders: Julian Draxler (VfL Wolfsburg), Sami Khedira (Juventus), Joshua Kimmich (Bayern Munich), Toni Kroos (Real Madrid), Thomas Mueller (Bayern Munich), Mesut Ozil (Arsenal), Lukas Podolski (Galatasaray), Andre Schuerrle (VfL Wolfsburg), Bastian Schweinsteiger (Manchester United), Julian Weigl (Borussia Dortmund)
Forwards: Mario Gomez (Besiktas), Mario Goetze (Bayern Munich), Leroy Sane (Schalke 04)
(Reporting by Karolos Grohmann, editing by Ed Osmond)
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