Hughes, 23, has registered a series of horror Test scores since November - managing to reach 20 or more runs just twice during his last eight Tests.
Lawson believes Hughes' time is up, despite 17 Tests to his name, and should make way for 29-year-old Ed Cowan who has produced some impressive scores for Tasmania.
“I think it’s a no brainer at the moment, Phil’s so out of nick it’s not funny,” the former coach of Pakistan told Sky Sports Radio.
”Ed’s so far in form it’s a laughing matter, one guys making runs at every opportunity the others battling away, it’s a no brainer that one.”
While Brad Haddin and fellow opener David Warner made ther most of the the opportunity to slog it out on the T20 KFC Big Bash League, Hughes opted not to play - a mistake according to Lawson.
”There’s virtually no cricket,” he said.
“All we’ve got is Twenty20 cricket.
“It would clear the mind… stick on whatever pastel shade you want to wear… I think it would be a relaxation thing for him playing T20.”
Lawson is also pushing for the dismissal of former captain Ricky Ponting.
The former Test skipper has only managed to register two fifties in his last nine Tests and of those matches, Ponting has four ducks to his name.
According to Lawson, it is time for a shake-up.
“The guy's out of form - he’s a part of Australia’s struggle and has been for a couple of years,” he said of Ponting.
“His average is down by 35 per cent, I don’t see anything in the form line that sees him getting any better.
“I wouldn’t be having him playing I would be starting that new era for the middle order.
“His form is not great and hasn’t been for a little while.
“I would not be playing someone who has been a good player but 'has been' is the optimum phrase… let's shake up the middle order and get someone else in there.”
Lawson said he would select Cowan to open over Hughes and leave Shaun Marsh out with some concern remaining over his back.
“In ideal circumstances I would have Cowan at the top for Hughes and then I would have (Shane) Watson at five for Ponting,” Lawson said.
“If they do have Watson and he can’t bowl you have to think about do you want (Daniel) Christian to be that all rounder.
"Mike Hussey is still living off his 90 average against Sri Lanka, bad since then but I’d be giving Hussey more opportunities but not Ponting.”