Phil Foden and Mason Greenwood are to leave the England camp after an "unacceptable" breach of coronavirus quarantine guidelines in Iceland.
The Football Association is investigating the breaches after Saturday's 1-0 Nations League victory.
Manchester City midfielder Foden, 20, and Manchester United forward Greenwood, 18, both made their senior international debuts in the game.
Manager Gareth Southgate said they had been "naive" and had apologised.
A Reykjavik Metropolitan Police spokesperson told BBC Sport that both players were fined 250,000 Icelandic krona (£1,360).
"It's a very serious situation and we have treated it that way and have acted as quickly as we have been able to," added Southgate.
"We have dealt with it appropriately. I recognise their age but the whole world is dealing with this pandemic."
In a social media post on Monday evening Foden said missing England's next game on Tuesday against Denmark "hurts" and he will "learn a valuable lesson from this error in judgement."
"I made a poor decision and and my behaviour didn't meet the standards expected of me," he wrote.
"I apologise to Gareth Southgate, to my England team-mates, to the staff, supporters and also to my club and my family."
According to reports in Icelandic and other media, Foden and Greenwood allegedly met two women in a separate part of the hotel away from where the England team were staying.
When asked about the reports, Southgate said: "Nothing has happened in the areas we occupy in the team hotel.
"We are still getting to the depths of all the information because it was only brought to my attention only a couple of hours before training.
"We had to decide very quickly that they couldn't have any interaction with the rest of the team, wouldn't be able to travel to training.
"Given the procedures that we have to follow now, they'll have to travel back to England separately."
Later on Monday, an FA spokesperson said: "Whilst in Iceland, both Phil Foden and Mason Greenwood spent time outside of our private team area, which was a breach of our Covid-19 rules.
"While they did not leave the team hotel, it was an unacceptable breach of our protocol. They have both apologised for their serious lack of judgement."
The FA has launched a "full investigation" and apologised to the Football Association of Iceland, saying it is "taking the appropriate steps". It has also assured the Danish Football Union "that all other players and staff members have been isolated within our group throughout this period".
Southgate has not chosen to call up any replacements and will have a 21-man squad to choose from for the match against Denmark in the Nations League on Tuesday (19:45 BST kick-off).
United and City condemn players
Greenwood's England call-up followed a breakout season at United, in which he scored 17 goals, while Foden became a regular starter in Pep Guardiola's City side in 2019-20.
A Manchester City spokesman said Foden's behaviour was "totally inappropriate" and "fell well below the standard expected of a Manchester City player and England international".
A Manchester United statement said the club are "liaising with the Football Association and are disappointed with the actions of Mason Greenwood".
'They have let Southgate, the team and fans down' - analysis
Former England winger Chris Waddle BBC Radio 5 Live
A big part of being a footballer is discipline. These young lads made their debuts and have bright futures ahead of them. They are wonderfully talented footballers and will probably go on to make a lot of caps and he [Gareth Southgate] has done the right thing sending them home.
They have been irresponsible. They haven't just let Gareth down; they have let the group down and the fans. They are young lads and unfortunately they have to learn.
I'm sure when they get going again next year, they will get themselves back in if they're playing well for their clubs. It's a horrible lesson to learn at a young age, when they have just got into the squad. That's what will upset Gareth.
They are young and naive. These are players that are just starting out their careers and it will stick with them for a long time.