The 31-year-old all-rounder had earlier starred in Australia's first T20I mauling of Sri Lanka in Adelaide on Sunday where he smashed 62 runs off just 28 balls.
Left-handed batsman D'Arcy Short has replaced Maxwell in the Aussie squad ahead of the third match against a sorry Lanka in Melbourne on Friday.
Meanwhile, Cricket Australia said Maxwell's absence is expected to be short.
Maxwell has been battling with mental health
Australian cricket team's psychologist Dr Michael Lloyd said in the statement that Maxwell is being pro-active in his treatment. Also, coach Justin Langer said Maxwell, like many others, has been wearing a mask to hide his private battle with mental health.
Maxwell had to put on a mask, says Langer
Langer stated people suffering from mental issues have to put on a mask.
"We saw how he fielded again yesterday, but he had to put on a mask," Langer said.
"People in public positions often have to put on masks. That's the mask he puts on. That's his armour, his energy and the way he plays. He's the great entertainer."
Langer elaborates how Maxwell opened up to him
"You know how you can just sense with people, when they're not quite right, and I just asked him the day before the Adelaide game, and that's when he said, Na, I probably need to have a little bit of a chat," said Langer.
'Maxwell will spend a short time away from the game'
Meanwhile, team psychologist Dr Lloyd said Maxwell's indefinite break is a decision he reached with team officials and medical staff.
"Glenn Maxwell has been experiencing some difficulties with regards to his mental health," he said.
"As a result, he will spend a short time away from the game. Glenn was proactive in identifying these issues and engaging with support staff," he added.