Baxter, a sophomore, did not make the trip with the Trojans to South Bend for USC's game against Notre Dame last week, instead heading home to San Diego for the weekend. He skipped a practice last week because of what was called a "family issue," and arrived late to another session because of what was called an "academic issue."
"The decision has been made for Dillon Baxter to focus on his academics," Kiffin said in a statement Tuesday. "As he does so, he will not be part of our football program.
"However, we will continue to support him with our academic services department."
During the weekend, Kiffin declined to add more context to the situation or to comment on Baxter's status, first immediately after the Trojans' 31-17 win over Notre Dame and then during his weekly conference call with the media on Sunday, when he said he'd wait to address Baxter's status until it was "finalized," leading to rampant speculation that the second-year player would transfer to another school.
But as of Tuesday, he remains enrolled at USC, and Kiffin would not say he was kicked off the team.
"There was no word in there (like) suspension," Kiffin said after Tuesday's practice, referring to the school's brief statement about Baxter. "We're done talking about it. ... This is all about no distractions, so it's why we're not answering questions. We don't want our players or our coaches dealing with it. Our team has had great focus over the last couple of weeks on the road, and the last thing we want to do is get distracted."
Kiffin has set a precedent of allowing players kicked off the team to return, as was the case last season of then-freshman receiver Markeith Ambles, who re-joined the team in January after a two-month hiatus.
Baxter and Ambles were involved in multiple disciplinary situations together as freshmen. Ambles now is off the team and enrolled at East Mississippi Junior College. Baxter, who turned 20 on Saturday, repeatedly has fallen out of favor with Kiffin.
During his first practices in spring 2010, he was an immediate sensation, prompting Kiffin to compare him on multiple occasions to former USC star running back Reggie Bush.
But he eventually found himself in Kiffin's doghouse. During that summer, he was suspended for the season opener for an unspecified off-field issue, and he also missed a November game against Oregon State after he was found to have accepted a golf-cart ride from a student-agent, in violation of NCAA rules.
In June 2010, after USC was hit with NCAA sanctions including a two-year bowl ban and a loss of 30 scholarships over three years, Baxter told a school compliance official that he had been illegally contacted by coaches from various programs across the country, leading USC to report the violation to the NCAA.
When it turned out to be false, then-athletic director Mike Garrett was forced to send a letter of apology to the five schools named by USC in its filing to the NCAA.
Still, Baxter was expected to have a major role in the USC offense as a true freshman, but he gained only 252 total rushing yards on 59 carries, and scored one touchdown.
This season, Baxter was competing for a starting spot after Marc Tyler was suspended for off-field issues. But he lost out to fellow second-year player D.J. Morgan and has been a minor factor in the offense through six games, totaling just 29 rushing yards on nine carries.
Baxter has called himself a "knucklehead," but also repeatedly has expressed displeasure with the number of carries he's received this season, including when he said that Kiffin has "his own agenda" with the running backs following USC's win over Syracuse in Week 3.
In interviews, he has maintained that he has not considered a transfer. But a private meeting with Kiffin, Baxter and his family the day after the Trojans' season-opening win over Minnesota prompted speculation that the 5-foot-11, 195-pounder would consider moving schools if his playing time didn't increase.
He could not be reached for the comment.
Baxter, a top recruit in the Class of 2010 out of San Diego Mission Bay High, was recruited by Florida, Michigan, Oregon and Tennessee, among others.
Pedro Moura covers USC for ESPNLA.com. Information from The Associated Press was used in this report.