James is expected to be out for at least eight weeks with a knee injury, meaning he won't play in the World Cup.
The 22-year-old right-back sustained the injury in the 2-0 win at AC Milan.
The World Cup kicks off in just over a month's time.
Kyle Walker and Trent Alexander-Arnold are both out due to injuries.
Walker had groin surgery in October while Alexander-Arnold injured his ankle last weekend.
He hopes to be ready for the World Cup.
Trippier is one of the strongest choices in that position.
James was assessed by a specialist this weekend after receiving treatment from the club.
"Reece will have a rehabilitation programme and is expected to be out for eight weeks," the statement said.
Graham Potter was asked about the possibility of players missing the World Cup through injury.
They are going to be upset if that happens. He said that they want to go.
They know that it's a profession where things can happen and they are competing at the highest level.
We will help them deal with the upset. I miss the World Cup more than anything from my career.
Iran will be England's first opponent in the World Cup.
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