Lyons made a comment about Piniella's Hispanic heritage that FOX executives felt was inappropriate, forcing quick action.
"Steve Lyons has been relieved of his FOX Sports duties for making comments on air that the company found inappropriate," network spokesman Dan Bell told The Associated Press.
With Lyons no longer part of the crew, Angels announcer Jose Mota will be the third man in the booth for the rest of the series, joining play-by-play man Thom Brennaman and Piniella.
Piniella declined comment on Lyons' dismissal before the game, saying only, "No, he's not here today."
Lyons played in the Major Leagues for nine seasons (1985-93). In his post-playing days, he had established himself as a regular voice on FOX.
Lyons earned two Emmy Awards, one for "Outstanding Studio Show" in 1999 and the other for "Outstanding Sports Personality/Studio Analyst" in 2000.
However, his time at FOX did not come without incident.
In 2004, FOX suspended Lyons for making insensitive on-air comments regarding outfielder Shawn Green, who is Jewish, and elected not to play on Yom Kippur.
Last week, Lyons and Brennaman, during the National League Division Series between the Mets and Dodgers, mocked the glasses of a Mets fan. It turned out that the fan was partially blind, leading to an on-air apology from Lyons and Brennaman.
Ian Browne is a reporter for MLB.com. Material from the Associated Press was used in this report. This story was not subject to the approval of Major League Baseball or its clubs.