The news came days after a police report of an alleged sexual assault including the three was made public.
"It was very clear to us that those weren't players we wanted representing our organization," said athletic director Rob Mullens, who said the players were suspended on April 30.
Mullens did confirm that coach Dana Altman will continue to be the men's head basketball coach.
"There's four people whose lives have been greatly altered here," Altman said at a press conference. "I feel really bad for the victim and her family.
"I think good people can make bad decisions. This obviously was a very bad decision." Dotson started 70 of 71 games he played at Oregon and was the team's second leading scorer as a freshman.
Austin never played at Oregon. Mullens said he was unaware of a previous sexual assault investigation during Austin's time at Providence. Altman confirmed that all three players had left campus and returned to their families.
Altman stated he did not foresee any further departures. Oregon is currently down to three scholarship players on campus: Joseph Young, Jalil Abdul-Bassit and Elgin Cook.