Fraser’s current deal with Bournemouth expires on June 30, when he will become a free agent.
The 26-year-old Scotland international has been linked with moves to Arsenal and Tottenham Hotspur in the past.
Fraser was still eligible to feature in Bournemouth’s next two games before walking away for free but Howe wants to include only committed players in his plans.
The South Coast side currently occupy the final relegation spot in the Premier League standings.
"[Fraser] has now played his last game for the football club. He won't be involved with us for the last nine games," Howe said in his news conference previewing Saturday’s game against Crystal Palace.
"I only want players who are fully focused on the relegation battle we have ahead and I'm looking forward to doing that with my squad."
He added: "These are the most important games this football club has had in recent times and we need everybody in the same position mentally, fight tooth and nail for the football club.
"Ryan, due to his contract situation, can't commit to that. Two games for us wasn't going to make the difference. We need a nine-game commitment and he can't give that at this moment in time.
"We go ahead with the current squad and probably the strongest squad I've had to pick from this season. Hopefully that will show in the games we have."
Fraser has featured 28 times in the Premier League this season, scoring just once and providing four assists but those figures represent a significant drop compared to seven goals and 14 top flight assists last season.
