Anelka was asked to apologise by French Football Federation president Jean-Pierre Escalettes and, upon refusing to do so, was asked to leave the squad.
"He will leave the Team France camp this evening," said a statement fff.fr.
The Chelsea forward was apparently criticised by Domenech for straying out of position during a goalless first half against Mexico, prompting an expletive-laden response from the 31-year-old.
"Words spoken by Nicolas Anelka to the national coach, Raymond Domenech, are completely unacceptable to the FFF, French football and the values they defend," read the FFF's statement.
"After being informed on Friday evening of the serious incident during half-time of the France-Mexico match, federation president Jean-Pierre Escalettes asked Nicolas Anelka in the presence of captain Patrice Evra to present an official apology to the French public and to express regret for his remarks to Raymond Domenech, the staff and 23 players from the France team.
"Upon refusal by the player to deliver a public apology, he [Escalettes] made the decision - in full agreement with the coach and members of the official delegation in Knysna - to exclude Nicolas Anelka from the group."