Lilly, set to make his first start of the season, began the year on the DL with a strained neck.
Dodgers manager Don Mattingly said Coffey hasn't been 100 percent the last few games, and has been receiving treatment on the knee.
"He is OK. It is something that has been creeping up on him a little," Mattingly said. "Honestly though, if we were later in the year, I don't know if we would be DLing him."
More than anything, Mattingly said the team wanted to make sure the injury didn't linger or get any worse.
In three appearances this season, all against the Padres, Coffey has tossed one inning, surrendering four runs on four hits. In Friday's game, the right-hander couldn't record an out, giving up two runs on two hits in the seventh inning.
"We felt like now it was best to get him healthy and get it behind us," Mattingly said. "It is a long season and he hasn't thrown the ball the way he is capable of."
The move does allow the team to keep right-handed reliever Josh Lindblom a little longer. A valuable extra piece in the Dodgers bullpen with Lilly on the DL, Lindblom has excelled in four games this season, giving up only one hit in six innings of work with two holds.
"Josh is throwing the ball well, but still has options and if Ted hadn't got hurt, Josh wouldn't have been here at all," Mattingly said. "He has been a welcome addition for us, though."