Celtic take Sion's place in Europa League
Celtic were awarded 3-0 wins in each leg of the play-off after the European governing body accepted their protests.
"We are pleased by this decision, the approach which has been taken by UEFA and the fact UEFA rules and regulations have been upheld," Celtic said on their website.
The ruling could place the Swiss FA in a delicate situation after the players were allowed to be fielded in the Swiss League following a civil court ruling.
FIFA statutes prohibit any football-related disputes from being taken to the courts and federations which fail to enforce this can ultimately be suspended.
Football's world governing body has already sent a letter to the Swiss FA saying it is expected to comply with the statutes.
"The Scottish club questioned the eligibility of a number of the Sion players who participated in these matches, with the Swiss side winning 3-1 on aggregate," UEFA said in a statement.
"The Control and Disciplinary Body accepted both protests and decided to award both ties to Celtic by forfeit (3-0)."
The first leg ended goalless and Sion won the return 3-1.
Celtic, the 1967 European champions, will now visit Atletico Madrid, who won the Europa League in 2010, on September 15 followed by matches against Udinese and Stade Rennes in Group I.
Sion president Christian Constantin, meanwhile, told the website of Le Matin newspaper that he would appeal.
Sion signed six players during the close-season despite FIFA saying the club was still subject to a transfer ban.
Sion were banned from signing players for two transfer periods, starting from the 2010/11 season, after FIFA found the club guilty of inducing Egypt goalkeeper Essam Al Hadari to break his contract with Cairo-based Al Ahli in 2008.
Sion claim they have already served the ban but FIFA says it runs until the end of this year.
The new signings were initially barred by the Swiss Football League, however the players took their case to a civil court in Martigny which ruled in their favour.
The Swiss League then said it had no alternative but to allow them to play.
It is not clear if Sion were confused about the terms of the ban or whether their fiery president Constantin was acting in defiance of FIFA when the signings were made.
Scotland now have a representative in Europe after Rangers were eliminated in the play-offs of the Champions and then Europa League along with Hearts, and Celtic initially, from the latter.