Longhorns coach Mack Brown announced the decision a day after Collins was arrested in the Austin suburb of Pflugerville, where police say Collins is suspected of driving a vehicle involved in an armed robbery.
According to police, the victim was approached in the parking lot of a fast-food restaurant by a man holding a gun and demanding money. Police say the man jumped in a car as it sped off, and the car was pulled over a short time later.
Collins and two other men were charged with aggravated robbery and engaging in organized criminal activity. Pflugerville police wouldn't release any other information, including whether Collins is still being held or has an attorney.
Collins was declared academically ineligible by the NCAA because of insufficient progress toward his degree.
The junior continued practicing with the Longhorns but didn't make the trip to the BCS championship game in Pasadena, Calif.
No. 2 Texas plays top-ranked Alabama at the Rose Bowl on Thursday night.