Finn has not played a single competitive match since arriving in late October and was the only one of the initial 17-man Ashes squad not to appear in the Test series. The England and Wales Cricket Board released a statement on Wednesday revealing the 24-year-old would leave the tour to "continue working on technical aspects of his game".
Finn's early departure comes with four one-day internationals and three Twenty20s still to be played before England return home. "With Steven we have made a decision he is going to go home," Giles said shortly after the team, and Finn, arrived in Brisbane for Friday's second ODI. "We feel it is the best thing for him. He's obviously not been bowling that well and not bowling well enough to be selected.
"We felt right now the best place for him to be is out of a performance environment. Steven is not selectable at the moment."
Finn's lack of confidence was apparent during a training session at the MCG last week, when he spent the majority of his time bowling into an empty net and speaking to Giles and skipper Alastair Cook. Giles said he suspected Finn would need to take some time away from the game before attempting to cure his problems.
"Sometimes through your career you go through those ups and downs and his timing is out," he said.
"That then can affect your confidence and certainly it [the ball] is not coming out [of his hand] as quickly as he would like either. I suppose he has been in this state for at least a couple of months and it hasn't worked. "At the moment Steven needs a bit of space in the very short term he probably needs a couple of weeks away from cricket full stop."
Giles denied Finn's problems were caused by too many different coaches trying to alleviate a problem that can be traced back to when he unintentionally started to hit the stumps during his bowling action.
That practice, subsequently known as 'Finning', has since been outlawed as a no-ball. "The important thing to say is that whichever coach has been working with him, be it at Middlesex or England, we've only got the interests of Steven Finn at heart in getting him back bowling as well as he can," Giles said.
The news of Finn's forthcoming departure - he will remain in Brisbane for at least another day - arrived moments after he was confirmed in England's provisional 30-man World Twenty20 squad.
It remains to be seen whether he will have rediscovered his action in time for when the final 15-man list is to be confirmed early next month.
It was, however, not so long ago that he was the spearhead of the limited overs attack and regarded as an important part of England's quest to regain the Ashes this winter.
"He is a really key asset to us going forward - selfishly for me from a one-day and T20 bowlers [perspective] but also the Test team as well," Giles said. "He is a million-pound asset and when you've got assets like that you look after them."
And Finn need only look at the stunning revival of Ashes man-of-the-series Mitchell Johnson to know a return to form may not be far away.
Johnson's Test career appeared over when he was left out of Australia's squad for their 3-0 defeat in the summer. But the 32-year-old's return has been spectacular as he snared 37 English wickets to regain the urn.
Giles believe parallels can be drawn between Johnson and Finn - who was the youngest England player to take 50 Test wickets.
"It [Johnson's revival] does give us confidence and knowing Steven Finn as well," he said. "He's worked incredibly hard, you can't fault that. Mitch has done fantastically well. Steven Finn has similar capabilities."