The former Liverpool star was due to be the channel's lead pundit for the Premier League clash between Stoke City and Manchester City.
But he will not be part of the coverage after footage emerged of the 40-year-old appearing to spit at a 14-year-old girl over the weekend while driving.
Carragher apologised oublicly for the incident, which occured on Sunday following Liverpool's 2-1 defeat at Manchester United, and also to his TV bosses in person on Monday morning.
Sky Sports chiefs have now decided to pull him from Monday's MNF show and are set to hold further discussions over whether to terminate his reported £1million-a-year contract.