The Italian star will sit out this week's match against the Three Lions due to a continuing injury that also saw him unavailable for Sunday's Community Shield
The 22-year-old striker missed his side's 3-2 Community Shield win against Chelsea at Villa Park on Sunday, but was expected to feature in Berne against the team the Azzurri knocked out of Euro 2012.
Balotelli was influential in Cesare Prandelli's side reaching the final, firing two goals to defeat the much-fancied Germany in the semi-final.
Prandelli has chosen to replace the striker with Udinese forward Diego Fabbrini, who scored just twice in Serie A last season.
Balotelli will now return to Manchester to recover from conjunctivitis ahead of Saturday's curtain raiser with newly-promoted Southampton.