Yuvraj, who got out to a second-ball duck the only time he came out to bat in the lost three-match ODI series against South Africa, was replaced by Stuart Binny, son of former India all-rounder Roger Binny.
Binny, 29, has played 53 first-class matches for Karnataka and scored 2714 runs at an average of 34.79, besides taking 79 wickets.
Fit-again pacer Varun Aaron, 24, has made a comeback to the ODI squad replacing Mohit Sharma, who failed to impress in South Africa. If he makes it to the final XI of the five-match ODI series against New Zealand, it would be Aaron's first 50-over appearance for India after 2011.
The Test team was not altered too much with Ishwar coming in place of Pragyan Ojha being the only change made to the 17-member squad for the two-match series against the Kiwis starting February 10 in Auckland after a two-day practice match.
The 24-year-old Ishwar, who replaces Ojha, has played 31 first-class matches, grabbing 131 wickets at an average of 24.43.
The rest of the Test line-up has been left untouched with R Ashwin, who did not impress much with his bowling, holding on to his place despite the conditions in New Zealand being not too conducive for slow bowlers.