Nurdin, who was jailed in 2007 for misusing funds but continued to run the PSSI from his cell, is seeking a third term despite his premiership resulting in angry demonstrations in Jakarta and calls for his departure.
FIFA president Sepp Blatter had made the ruling to ban Nurdin from running in the March 26 election during a meeting in Zurich on Tuesday, the Jakarta Globe quoted Indonesian ambassador to Switzerland Joko Susilo as saying.
"Sepp Blatter said FIFA upholds the statutes that states a convict cannot lead a football organization," Joko said.
"If Nurdin is reelected, FIFA won't legitimise the election result. They want Indonesian football to be much better."
FIFA was unable to provide immediate comment when contacted by Reuters.
Nurdin denied he had been banned by FIFA.
"The information from the ambassador must be untrue because the decision of FIFA's executive committee meeting [on March 3] has been received by the PSSI and it is impossible for FIFA to issue any decisions outside the meeting," he was quoted as telling local news broadcaster Metro TV.
Separate Indonesian reports on Wednesday alleged other Indonesian football identities, including oil tycoon Arifin Panigoro, had also been banned from running for the 2011-2015 term.
Panigoro launched the rebel Indonesian Premier League football league in January in defiance of FIFA and was banned by the PSSI's electoral commission from running against Nurdin last month, sparking violent demonstrations.
While hugely popular, the game has reached crisis point in Indonesia, which is 129th in world rankings despite a population of some 230 million people.
The Southeast Asian country launched a surprise bid for the 2022 World Cup finals but were dropped from the race in 2010 due to a lack of government support.
