The powerful Worcester centre will miss the three-Test trip due to an injury suffered while with England, although it is an aggravation of an older injury.
He joins a lengthy list of players currently sidelined, including Dylan Hartley, Anthony Watson, Jonathan Joseph and Courtney Lawes.
England head coach Eddie Jones has made three changes to his original 34-man squad. Te’o is out with what the Rugby Football Union describe as a “small repair to quad muscle”.
Sale Sharks back Cameron Redpath and flanker Jack Willis, who both have knee injuries, are also out.
The RFU announced call-ups for uncapped Gloucester full-back Jason Woodward, Northampton back Piers Francis and Wasps No 8 Nathan Hughes.
New Zealand-born Woodward, who qualifies for England through his grandmother, has produced consistently impressive form for his club Gloucester this season.
But there will be surprise in many quarters at Saracens full-back Alex Goode being overlooked, especially given his outstanding display in last Saturday’s Premiership final.
Goode delivered a majestic performance at Twickenham, playing a pivotal role as Saracens saw off Exeter 27-10.
Hughes, meanwhile, only recently returned to action following a knee injury sustained during this season’s NatWest Six Nations.
He was initially not expected to play again this term, but the 14 times-capped forward returned ahead of schedule in Wasps’ Premiership semi-final against Saracens 11 days ago.
England face South Africa in Johannesburg on June 9, before tackling the Springboks in Bloemfontein a week later and then completing the series in Cape Town on June 23.
England squad: M Brown (Harlequins), D Cipriani (Wasps), L Cowan-Dickie (Exeter), T Curry (Sale Sharks), E Daly (Wasps), B Earl (Saracens), N Earle (Saracens), O Farrell (Saracens), G Ford (Leicester), P Francis (Northampton), E Genge (Leicester), J George (Saracens), J Hill (Exeter), N Hughes (Wasps), N Isiekwe (Saracens), M Itoje (Saracens), J Launchbury (Wasps), A Lozowski (Saracens), J Marler (Harlequins), J May (Leicester), C Robshaw (Harlequins), D Robson (Wasps), B Shields (Hurricanes/Wasps), S Simmonds (Exeter), K Sinckler (Harlequins), H Slade (Exeter), D Solomona (Sale Sharks), B Spencer (Saracens), B Vunipola (Saracens), M Vunipola (Saracens), H Williams (Exeter), M Wilson (Newcastle), J Woodward (Gloucester), B Youngs (Leicester).