Pietersen has been at loggerheads with the ECB for some time now, but seemed to have resolved any issues when he announced yesterday that he wanted to play for his country in all forms of the game.
However, the ECB are still unhappy about rumours suggesting that Pietersen had sent derogatory texts about some of his England teammates, and the South African-born batsman's refusal to deny these claims in public have led to his exclusion.
"During the past week we have held several discussions with Kevin Pietersen and his advisors. Following a constructive meeting it was agreed that a number of actions needed to be completed to re-engage Kevin within the England dressing room," said ECB managing director Hugh Morris.
"A fundamental item was to confirm publicly that no derogatory texts had been sent by Kevin to the South African team. This has not been forthcoming despite clear timelines being set to allow the selectors to pick the squad for the third Test match. We provided an additional six hours this morning to provide every opportunity for agreement to be reached but regrettably this has not been possible.
"The success of the England team has been built on a unity of purpose and trust. Whilst we have made every attempt to find a solution to enable Kevin to be selected we have sadly had to conclude that, in the best interest of the team, he will miss the Lord's Test."
Pietersen played a major part in the second Test against South Africa, being named man of the match after hitting 149 and recording career best bowling figures.