The 30-year-old was named in the 15-man squad subject to finish recuperation from the damage, managed amid the second Test against Sri Lanka prior this month.
Yet, subsequent to playing amid a wellness test on Friday, it was found that the left-arm paceman had not completely recuperated.
Riaz will be supplanted by another left-arm quick bowler, Zia-ul-Haq, who was in the squad as a stand-by.
"Riaz knocked down some pins in nets on Friday and still feels firmness in his playing hand. Along these lines he withdrew himself from T20s squad. Zia will supplant him," a Pakistan Cricket Board articulation said.
Twenty-year-old Zia was amazing amid a Pakistan "A" group voyage through Sri Lanka a month ago.
Riaz said he was frustrated.
"Sadly still some firmness in my knocking down some pins hand Ideally one more week or somewhere in the vicinity to give my 100 percent," Riaz said on his Twitter account.
Pakistan, officially driving the five-match ODI arrangement by 3-1, will confront Sri Lanka in the fifth and last one-day in Hambantota on Sunday. That will be trailed by two Twenty20 internationals on July 30 and August 1 - both in Colombo.
Squad: Shahid Afridi (chief), Ahmed Shehzad, Nauman Anwar, Mohammad Hafeez, Mukhtar Ahmed, Umar Akmal, Shoaib Malik, Mohammad Rizwan, Sarfraz Ahmed, Yasir Shah, Sohail Tanvir, Imad Wasim, Anwar Ali, Mohammad Irfan, Zia-ul-Haq