The top Istanbul club were replaced by Trabzonspor, the league runners-up on goal difference last season, in Thursday's group stage draw for Europe's elite club competition.
Trabzonspor will play in Group B alongside Inter Milan, CSKA Moscow and Lille.
Before the draw, state-run Anatolian news agency reported Fenerbahce's appeal had been rejected by the Turkish football federation's arbitration board.
The Turkish Football Federation (TFF) decision to bar Fenerbahce, taken under pressure from European football's governing body UEFA, has added to revenue concerns among clubs since the match-fixing court case emerged, although no decision has been taken to relegate any clubs.
Fenerbahce said its loss of revenue due to the Champions League exclusion would be some 25 million euros and its shares tumbled 18 percent on the Istanbul Stock Exchange on Thursday.
Shares in Black Sea club Trabzon, which said it expected competition income of 20 million euros, surged 21.8 percent.
"Our club's lawyers applied to the TFF Arbitration Board to suspend and annul the decision to bar it from the UEFA Champions League," Fenerbahce said in a statement.
More than 30 players and officials have been jailed pending trial, including the Fenerbahce chairman Aziz Yildirim and the coach and deputy chairman of Besiktas, in connection with alleged manipulation in 19 matches.
Fenerbahce have said UEFA's stance on the issue is unlawful and that it could take legal action against both it and the Turkish federation, saying it was "innocent until proven guilty".
"With this decision [to bar the club], the TFF has bowed to the unlawful approach of UEFA," Fenerbahce said on its website.
The club's deputy chairman Nihat Ozdemir said he was resigning, without giving a reason. In comments to a broadcaster he had challenged the federation to relegate Fenerbahce if it believed the club was guilty of match-fixing.
UEFA had written to the federation on Tuesday saying Fenerbahce must withdraw from the Champions League or the TFF should take the decision to bar them or face a disciplinary investigation, the federation said.
"The [UEFA emergency] panel considered that the Turkish Football Federation took the right decision to protect the game, fully in line with our zero-tolerance policy against match-fixing," UEFA General Secretary Gianni Infantino said on Wednesday evening.
TFF Chairman Mehmet Ali Aydinlar said UEFA warned that Turkey generally faced a punishment of up to eight years if the federation did not act, Turkish media reported.
"SCAPEGOAT"
Fenerbahce asked why UEFA had not itself taken the decision to bar it and whether it wanted the federation to take legal and financial responsibility if the court decides Fenerbahce has no case to answer and the club seeks compensation.
"Has Fenerbahce, and in a sense Turkish football, been made a scapegoat to cover up UEFA's failure in the fight against match-fixing and ga
