His 14-day compulsory isolation will mean he will miss the Games tournament on July 26-28.
Powell will not be allowed to train or have any physical contact with the rest of his squad. However, he will conduct virtual coaching sessions with the squad. Assistant coach Renfred Dazel will take on the on-field coaching duties.
It has been a period of frustration for the Blitzbokke since they arrived in Japan. They had to go into isolation when they arriving in Japan last week because there was a positive Covid case on their flight.
Olympic Games protocols meant they went into quarantine.
None of the South African players or management tested positive upon arrival, but they delayed their departure to Kagoshima City, and their training camp was shortened.
Dazel told media that since leaving South Africa, they had endured their share of off-field dramas.
"We came to Japan well-prepared, with the hard work done at home, so this is just a small distraction in that bigger picture.
"We had good camps in Sandton and Robertson, and did very good work there; we came to Japan a week earlier mainly to acclimatise and get used to the humidity, and that has not changed," he said.
The virtual training with Powell was working well and the players had made the adjustment.
"We need some time out on the field from a physical point of view, so we hope to stretch the legs a bit in the later stages of the week.
"We are still in good spirits and understand that we cannot change those things we cannot control. We did manage to add some fun elements into the adjusted training schedule, and that certainly helped," Dazel said.