The Valencia midfielder suffered a hamstring injury in La Rojita's opening group game win over Russia and will fly home for further treatment missing the rest of the tournament
The Valencia midfielder, who only featured as a substitute for the final quarter of his side's 1-0 win over Russia on Thursday, complained of a problem shortly after the match.
Coach Julen Lopetegui admitted he was "worried" about the 22-year-old's condition following the clash at Teddy Stadium, and it has since been confirmed that he will fly home for further treatment on an injury to his left hamstring, ruling him out of the remainder of the tournament.
Canales suffered a succession of injuries last season which limited his involvment in los Che's campaign. He only managed 15 appearances in all competitions for the club last term.
Despite his lack of playing time, the former Real Madrid trainee has been linked with a return to Santiago Bernabeu this summer, with Carlo Ancelotti - the favourite to take charge of the Liga runners-up following Jose Mourinho's exit - believed to be a keen admirer of the midfielder.
Spain enjoyed a winning start to the defence of their Under-21 crown against Russia thanks to a late header from Alvaro Morata.