Ricciardo was caught up in an accident of fellow Australian Oscar Piastri in the early stages of Friday's second practice session.
Moments after Piastri had crashed his McLaren in Zandvoort's banked Turn 3, Ricciardo arrived at the scene and also hit the outside barriers while taking avoiding action.
Ricciardo's steering wheel snapped violently upon impacting the wall, with the 34-year-old complaining on the team radio about wrist pain.
Ricciardo was soon taken to a nearby hospital in Haarlem for X-rays, spotted with his left arm in a sling.
Later on Friday evening Red Bull advisor Marko confirmed to Autosport that Ricciardo had sustained a broken left hand, taking him out of action for the remainder of the Dutch GP weekend.
Red Bull junior Lawson, who was on standby at Zandvoort as the designated reserve driver for both Red Bull teams, will replace Ricciardo from Saturday's FP3 session onwards.
"He's broken something in his hand, so he won't race," Marko told Autosport.
"Lawson will drive. It's difficult for him. It's a shame because the car is good here."
AlphaTauri has since confirmed Ricciardo broke a metacarpal, with further updates to be issued in due course.
"After today’s incident during Free Practice 2 in Zandvoort, in which Daniel Ricciardo hit the barrier at Turn 3, he was brought to the local hospital and further examinations were carried out," the statement said.
"An X-ray confirmed he sustained a break to a metacarpal on his left hand, and this injury will not allow him to continue his duties, so he will be replaced by the team’s reserve driver Liam Lawson for the remainder of this weekend.
"The team wishes him all the best for the quickest possible recovery."
Lawson currently sits second in Japan's Super Formula championship with three wins, after finishing third in last year's Formula 2 season.
He is set for his first outing in a 2023 F1 car on Saturday, having not yet completed any rookie FP1 running for either Red Bull or AlphaTauri this year.
Lawson had also been mooted as a contender to replace Nyck de Vries from Hungary onwards, but Red Bull instead handed the seat to Ricciardo to inject more experience into the struggling AlphaTauri line-up.
Marko also added that the ousted de Vries' was not considered for a return on home soil.
It is not clear at this stage how long Ricciardo will be out of action for, but it is likely he will be absent from the Italian GP given it comes up next week.
Autosport understands Red Bull is exploring getting famed MotoGP surgeon Doctor Xavier Mir involved in Ricciardo's recovery.
He previously operated on Lance Stroll following the cycling accident which ruled him out of pre-season testing in Bahrain.
