The selection of Manchester United captain Maguire had been in doubt due the player being arrested while on holiday on the Greek island of Mykonos at the weekend. Maguire was found guilty on Tuesday of aggravated assault, resisting arrest and repeated attempts of bribery following his trial after an altercation with police officers.
In a quote from England's FA, Southgate said: "In light of this evening's developments, I can confirm I have withdrawn Harry Maguire from the England squad for the matches against Iceland and Denmark.
"As I said earlier today, I reserved the right to review the situation. Having spoken to Manchester United and the player, I have made this decision in the best interests of all parties and with consideration of the impact on our preparations for next week."
"It's clearly a decision that is not straightforward and a decision I could only take on the information I have," Southgate said earlier on Tuesday about Maguire. "I've spoken to Harry and I have the insight to the story which is very different to what is being reported.
"You can only make decisions on facts you are aware of. If the information changes down the line, I will have to review that decision.
"I have a fantastic relationship with the boy and I've no reason to doubt what he's telling me. It is important he knows that he has my support at this moment in time."
Centre back Maguire had pleaded not guilty and was released after spending two nights in police custody following his arrest. He was represented by his lawyers in court at a hearing on Tuesday.
After Tuesday's verdict, Maguire said he had instructed his legal team "with immediate effect to inform the courts we will be appealing".
Southgate has also named Raheem Sterling in his squad, despite the City forward attending a party in Jamaica at the weekend with sprinter Usain Bolt, who has since tested positive for coronavirus. As a matter of course, all players will be tested before meeting up with the squad at St George's Park next week.
While the selection and then withdrawal of Maguire will claim the headlines, the inclusion of Henderson, Greenwood, Foden and Phillips hints at Southgate's readiness to promote England's emerging talent ahead of next summer's rescheduled Euro 2020 tournament.
Goalkeeper Henderson has been handed the chance to dislodge Jordan Pickford from the number one spot following an impressive Premier League campaign on loan at Sheffield United last season, while Foden has been rewarded for making himself a first-team regular at City last season.
Greenwood's emergence at United has seen the 18-year-old elevated to the senior squad, while 24-year-old Phillips, who can play in midfield or at centre-back, has been selected after being the outstanding performer in Leeds's promotion campaign from the Championship last season.
England have decided against calling up a replacement for Maguire as they prepare to face Iceland on Sept. 5 in Reykjavik before taking on Denmark in Copenhagen on Sept. 8.
Captain Harry Kane is included in the squad despite being in quarantine following a trip to the Bahamas.