Garces, 29, joins the injured Matias Fernandez and cut trio Esteban Paredes, Gustavo Canales and Enzo Andia in being sent home from the initial 30-man squad.
Only two spots remain in Jorge Sampaoli's squad that will travel to Brazil 2014, where they face Spain, the Netherlands and Australia in Group B.
In a statement, the Asociacion Nacional de Futbol Profesional thanked Garces, a one-time international, for his commitment.
It leaves three goalkeepers – captain Claudio Bravo, Johnny Herrera and Cristopher Toselli – remaining, with the trio likely to make the final 23.
Garces' release is good news for Herrera, who was cleared to play for the national team despite an ongoing legal case.
It is being determined whether the Universidad de Chile goalkeeper, 33, breached a driving ban.
Herrera was sentenced to 41 days in jail in 2013 and given a two-year driving ban after being arrested for driving under the influence.
He ran over and killed a 22-year-old woman in 2009 when speeding, walking free after the trial was suspended due to a settlement with the victim's family.
