Off-spinner Seekkuge Prasanna will take Herath's place in the squad, to be led by Mahela Jayawardene [ Images ].
Apart from Herath, pacers Dhammika Prasad and Chanaka Welegedara [ Images ], who were part of the Sri Lankan squad for the ongoing tri-series in Australia [ Images ], have also been dropped from the team.
Fast bowler Suranga Lakmal makes a comeback into the squad after a long injury lay-off.
Lakmal, who last played for Sri Lanka during the ODI series against Pakistan in the UAE last November, returns to international cricket after fully recovering from an ankle injury.
The Sri Lankan selectors have also retained the three all-rounders -- Farveez Maharoof, Angelo Mathews [ Images ] and Thisara Perera -- who picked up injuries during the tri-series.
Mathews has been named as Jayawardene's deputy for the Asia Cup. Sri Lanka kick off their campaign against India [ Images ] on March 13.
Sri Lanka squad: Mahela Jayawardene (capt), Angelo Mathews (vice-capt), Tillakaratne Dilshan [ Images ], Upul Tharanga, Kumar Sangakkara [ Images ], Dinesh Chandimal, Lahiru Thirimanne, Thisara Perera, Farveez Maharoof, Sachithra Senanayake, Nuwan Kulasekara [ Images ], Lasith Malinga [ Images ], Seekkuge Prasanna, Suranga Lakmal.