3:59 PM PT -- There are rumblings that Josh Shaw concocted the story to distract attention from a domestic violence incident involving his girlfriend.
But TMZ Sports spoke with Shaw's attorney Donald Etra and he is adamant, "There is absolutely NO domestic violence."
He adds, "The real story has nothing to do with domestic violence."
Shaw has issued a statement through his lawyer ... saying, "I injured myself in a fall. I made up a story about this fall that was untrue. I was wrong to not tell the truth. I apologize to USC for this action on my part."
Shaw has not revealed the true reason behind the fall.
USC football player Josh Shaw admitted to USC officials that his story about heroically rescuing his nephew is a lie.
In a statement, USC says ... "Shaw came to USC athletic department officials this afternoon (Wednesday, Aug. 27) and admitted that he had lied about how he suffered his ankle injuries over the weekend." "He said that the story he told of rescuing his nephew in a pool in Palmdale, Calif., was a complete fabrication. He apologized for misleading his coaches, teammates, athletic department officials and the public."
USC head football coach Steve Sarkisian also issued a statement ... saying, "We are extremely disappointed in Josh. He let us all down. As I have said, nothing in his background led us to doubt him when he told us of his injuries, nor did anything after our initial vetting of his story."
Sarkisian continued, "I appreciate that Josh has now admitted that he lied and has apologized. Although this type of behavior is out of character for Josh, it is unacceptable. Honesty and integrity must be at the center of our program. I believe Josh will learn from this. I hope that he will not be defined by this incident, and that the Trojan Family will accept his apology and support him."
Sarkisian said that Shaw has been suspended indefinitely from all team activities.
USC says it regrets the posting of the initial story.
Story developing ...