The fast bowler is believed to have developed the rib injury during the first Test at the Gabba, having not bowled too much in the second innings.
“Hazlewood returned to Sydney for further assessment and rehabilitation,” Cricket Australia said.
“A decision on his fitness for the Boxing Day Test will be made in due course.”
Hazlewood bowled a total of 27 overs across the first Test, getting three wickets.
A decision over his replacement is yet to be made.
Australia routed England with a nine-wicket win at the Gabba in the first Test, a stadium England haven’t beaten the hosts in since 1987.