The 32-year-old will return to the UK for further scans after fears he has suffered cartilage damage to his right knee, ruling him out of action for up to eight weeks.
Kevin Pietersen ruled out of IPL and final New Zealand Test with knee injury
The 32-year-old had been complaining of problems with his right knee since the warm-up match to the Test series in Queenstown earlier this month.
He had been due to join up with the Delhi Daredevils, who play Kolkata Knight Riders in the opening match on April 3.
"Pietersen experienced knee pain while fielding in preparation for the four-day game in Queenstown earlier this month, ahead of the Test series," the ECB said in a statement.
"This has failed to resolve satisfactorily.
"Recent scans confirm an injury to the right knee with bone bruising and possible cartilage damage to the kneecap.
"The 32-year-old will return to the UK for further investigations and specialist review.
"The injury is likely to require ongoing assessments and a likely six-eight week period of rest and rehabilitation.
"Pietersen has therefore been withdrawn from all cricket including the Indian Premier League."
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