Gareth Southgate branded Phil Foden and Mason Greenwood "naive" after the England pair were sent home and fined by Icelandic police for a "serious" breach of coronavirus protocols.
Although England manager Southgate refused to comment on the nature of the virus protocol breach, widespread media reports said the England pair left the bio-secure bubble to meet two local girls during their time in Iceland.
Southgate responded by removing Manchester City midfielder Foden and Manchester United forward Greenwood from his squad for Tuesday's Nations League clash in Denmark.
Foden, 20, and Greenwood, 18, had made their senior England debuts in Saturday's 1-0 win against Iceland, but the pair will have to travel home separately from the rest of the squad, who were due to move on to Denmark on Monday.
"Unfortunately this morning it was brought to my attention that the two boys have broken the Covid guidelines in terms of our secure bubble," Southgate told reporters.
"We had to decide they couldn't have interaction with the rest of the team and wouldn't be able to train. Given the procedures we have to follow now, they will have to travel back to England separately."
A Snapchat video released in Iceland appeared to show the players with female company.
After reports Foden and Greenwood brought the women back to the team hotel in Reykjavik, the Football Association 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 duties.
"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 will be launching a full investigation into the circumstances leading up this breach.
"We have spoken to the Football Association of Iceland to offer our apologies. We have also assured the Danish Football Union that all other players and staff members have been isolated within our group throughout this period."
Iceland's chief epidemiologist Thorolfur Gudnason told a press briefing that it was "a serious violation of the quarantine rules".
Both players have been fined by 250,000 Icelandic Krona ($1,800, £1,350) by Reykjavik police.
Southgate's scheduled media briefing was delayed by an hour as he and the Football Association scrambled to manage the situation, which the England boss only became aware of just hours earlier.
Acknowledging their antics were unacceptable given the current global concern about the coronavirus, Southgate said: "It is a very serious situation and we have treated it that way. They have been naive and we have dealt with it appropriately.
"We are not underestimating how important it is we keep the bubble the way we have."
- 'Totally inappropriate' -
Southgate said both players had apologised for their behaviour, but conceded they should have acted more responsibly.
"I recognise their age, but of course, the whole world is dealing with this pandemic and there is a responsibility on all ages that they do their part," he said.
"These are two boys I don't know particularly well at the moment so I cannot speak in great depth. I've got to try to speak with them later in the appropriate way.
"They have apologised but everything has happened so quickly and we have to get to the facts."
City labelled Foden's actions "totally inappropriate" and called his behaviour "well below the standard expected of a Manchester City player".
In an apologetic statement, Foden said: "On this occasion I made a poor decision and my behaviour didn't meet the standards expected of me."
United said of Greenwood: "We are liaising with the Football Association and are disappointed with the actions of Mason Greenwood over this situation."
The controversy was the last thing Southgate needed after he had to withdraw Harry Maguire from the squad following the Manchester United defender's part in a brawl during a holiday in Greece.
Maguire was handed a suspended prison sentence and is appealing the verdict.
"All management roles are difficult and this is another level, in terms of what you have to deal and what is expected," Southgate said.