The out-of-form batsman will miss the matches in Multan and Rawalpindi after Friday's loss handed Pakistan their sixth consecutive Test defeat and left them at the bottom of the World Test Championship standings.
Babar struggled in the first Test against England, managing just 35 across both innings. He stepped down as captain in all formats following Pakistan's elimination from the 2023 ODI World Cup.
However, four months later, he was re-appointed as the Twenty20 Internationals and ODI captain but his second tenure also proved unsuccessful, leading him to resign once again.
The newly formed selection committee has also rested frontline pace duo of Shaheen Shah Afridi and Naseem Shah for the Tests.
Afridi, 24, a former captain in the T20I format has struggled to regain his form from before his knee injury.
Pakistan captain Shan Masood voiced his support for Babar in the wake of the defeat, labelling him as "Pakistan's best batter" and called for players to be given more time.
Pakistan batsman Fakhar Zaman also showed support for Babar minutes before the squad was announced on Sunday.
"It's concerning to hear suggestions about dropping Babar Azam. India didn't bench Virat Kohli during his rough stretch between 2020 and 2023, when he averaged 19.33, 28.21, and 26.50, respectively," Zaman wrote in a post on X.
"If we are considering sidelining our premier batsman, arguably the best Pakistan has ever produced, it could send a deeply negative message across the team.
"There is still time to avoid pressing the panic button; we should focus on safeguarding our key players rather than undermining them."
"We've had to carefully consider current player form, the urgency to bounce back in the series and Pakistan's demanding 2024-25 international schedule," Aqib Javed, member of the PCB selection committee, said in a statement on Sunday.
Uncapped players Haseebullah, Mehran Mumtaz, and Kamran Ghulam, were called up and Javed said: "We believe they will rise to the occasion and make the most of this opportunity in the remaining two Tests."
The second Test against England begins on Tuesday in Multan, with the hosts set to throw a curveball by re-using the same pitch as in the opening match.
It is rare for Tests to be played back-to-back at the same venue - and unheard of for the same pitch to be used twice in succession.
But after the first-Test hammering, it appears the hosts have sought a left-field solution.
The track was stubbornly flat in the last Test, with first-innings totals of 556 and 7-823 for seven and just 13 wickets in the first three days.
Now, Pakistan are seemingly ready to gamble that a worn wicket that hosted 353.3 overs of action in the past week offers greater balance between bat and ball than a pristine one.
Pakistan squad: Shan Masood (captain), Saud Shakeel (vice-captain), Aamir Jamal, Abdullah Shafique, Haseebullah (wicket-keeper), Kamran Ghulam, Mehran Mumtaz, Mir Hamza, Mohammad Ali, Mohammad Huraira, Mohammad Rizwan (wicket-keeper), Noman Ali, Saim Ayub, Sajid Khan, Salman Ali Agha and Zahid Mehmood.
With PA
14°C