Dixon had been suspended for an unspecified student conduct issue in March and had missed spring practice.
Dixon, a rising sophomore, was ranked the second-best tight end recruit in the 2014 recruiting class by 247Sports.
The 6'4", 240-pound Dixon was also suspended for one game during the 2014 season, also for an unspecified conduct issue.
In 12 games during his inaugural season with the Trojans, he caught 14 passes for 198 yards and four touchdowns.
The move raises questions for the Trojans at the tight end position. The only scholarship tight end currently on the roster is Jalen Cope-Fitzpatrick, who was academically ineligible for the 2014 season and whose status for the 2015 season is uncertain, according to College Football Talk.
True freshman tight end Tyler Petite is scheduled to join the team before fall camp begins.