It is alleged the 27-year-old assaulted a woman at a Dunedin bar in the early hours of Sunday morning.
While Frizell has not been charged by police, Highlanders chief executive Roger Clark has made the decision to stand down the loose forward.
"I think it is important for us all to remember at this time, that these are allegations and no charges have been laid," Clark said.
"However, this has been a distraction for the player and the team. And in the interests of everyone concerned we are going to omit Shannon from the team this week."
Clark said the Highlanders had investigated the incident.
"However, because it is now a police investigation, we will obviously leave it with the police and will redress that situation once they come back to us".
Clark said he would be surprised if any charges were laid "just based on what I know".
"That’s a personal opinion."
Ask why he was standing the player down if he did not believe charges would be laid, Clark said it had been a "massive distraction" for the team and Frizell "and it is important he gets a break from it".
It is not the first time Highlanders have been in the headlines for the wrong reasons recently.
In April the Highlanders suspended Josh Ioane, Sio Tomkinson, Daniel Lienert-Brown, Marino Mikaele-Tu’u, Teariki Ben-Nicholas and Sione Misiloi for one game for breaching team protocol.
And in August some Highlanders were accused of upsetting guests at a Queenstown motel. Both incidents involved alcohol.
"I think there are some lessons to be learned for individual players and ourselves as a club. The one for me, really, is if you put yourself in a compromising position you can get yourself into these situations."
Hugh Renton will replace Frizell in the starting XV.
Lock Pari Pari Parkinson has returned from injury and will slot into the second row.
Michael Collins will start at centre, which means Sio Tomkinson shuffles out a spot to the right wing and Sam Gilbert moves to fullback
The Reds won the Australian competition. Head coach Brad Thorn has handed halfback Kalani Thomas a starting debut and Isaac Henry is set to make his Super Rugby debut from the bench.
Wallabies trio Taniela Tupou, Lukhan Salakaia-Loto and Fraser McReight have been asked to make an impact from the bench.
