Gremio appeal unsuccessful
Gremio suffered a 2-0 loss in the round-of-16 first leg, before a Brazilian sports tribunal unanimously voted for Gremio's exclusion.
While the verdict was partially overturned, a points deduction has effectively ended Gremio's involvement in the competition.
Santos will now meet Botafogo in the quarter-finals.
Gremio, who were also fined 54,000 Brazilian real, are four-time winners of the Copa do Brasil, but have not tasted glory since 2001.