The 21-year-old American sprinter won the 100m final at the U.S. Olympic Trials with a time of 10.86 seconds.
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The four alternates who were traveling to Japan with the qualified men's and women's teams will now be part of their respective full rosters.
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USA Basketball managing director Jerry Colangelo: "[James] made a contribution that is appreciated, but I think his time is over."
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Olympic organizers have amended their policy regarding the attendance of family members at the Tokyo Games.
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When asked if she would play in doubles or mixed doubles in Tokyo, Venus Williams said "I don't think so."
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