Shaw has been suspended indefinitely from all of the Trojans' team activities, the school announced in a statement Wednesday.
The school didn't explain how Shaw actually was injured in its statement, but USC officials say they regret posting a story lauding Shaw's tale on their website Monday.
USC coach Steve Sarkisian says the Trojans are "extremely disappointed in Josh." Shaw is a fifth-year senior, a team captain and a key starter in USC's defensive secondary.
The school notes Shaw has retained legal counsel.