According to the club’s website, an out of competition drug test by the Football Association discovered traces of a banned substance in his sample.
A statement by the Blades reads: “The player has informed the club that he engaged in no wrongdoing involving any banned substance.
“Established policy in these circumstances requires that the club temporarily suspend the player pending further findings.
“The club has taken this step without prejudice to the player’s claim of no wrongdoing. The club will offer no further comment at this stage.”
The 23-year-old Bootle-born player has spent two seasons at Bramall Lane having signed from Oldham in the summer of 2013.
He started his career at Everton where he made his senior debut at the age of 16 in a Premier League match in August 2008, coming on as a second half substitute against Blackburn.
A PFA statement reads: “The PFA notes the charge levied against Jose Baxter of Sheffield United regarding an alleged anti-doping violation.
“We are providing our full support at this difficult time but will make no further comment as the matter is subject to the appropriate processes.”
And another player to fail a drug test is Wolves keeper Aaron McCarey who, according to the club’s website, “is now subject to an immediate FA suspension from all competitive forms of football.”
Wolves report that the 23-year-old Irishman failed a test for a non-performance enhancing substance.
The statement adds that “McCarey strenuously denies deliberately taking any banned substance. The club is extremely disappointed and concerned that one of its players has failed a drugs test.
“Neither the player nor the club will be making any further comment whilst the FA investigation is underway and not until the matter has been fully concluded.”