Mazembe, who were seeking an unprecedented third successive continental title, were found guilty of fraud by the competition's organising committee at their regular mid-season meeting in Cairo.
Mazembe used Janvier Bokungu, who CAF found was contracted with another club but used by Mazembe in both legs of their second round tie against Simba SC of Tanzania in April.
CAF said they had investigated the eligibility of Bokungu, who had signed for Mazembe despite still being under contract at Esperance of Tunisia, after complaints from Simba.
Bokungu, 22, was suspended earlier this month by African football's governing body despite Mazembe's assertion he had terminated his contract in Tunisia to re-join his old side.
Mazembe's owner, Moise Katumbi, denied any wrongdoing and said they would appeal against CAF's decision.
"We are very surprised to see that Mazembe has been disqualified, we know our administration (of the club) is very clean," he told Reuters by telephone, adding that Mazembe's fans were shocked at the news.
A CAF statement said Simba would be reinstated into the competition and would play a one-off match with Morocco's Wydad Casablanca, who lost on aggregate to Mazembe in the third round last weekend.
The winner will qualify for the league phase which starts in mid-July. The draw will be made in Cairo on Sunday.
Mazembe are also in danger of forfeiting their place in the Congolese league after departing this week for a training camp in Brazil despite having a key match scheduled at the weekend.
The league said the request (to travel to Brazil) had been turned down because it was submitted on the same day that Mazembe left.
"Given that we received your letter asking for the postponement of league matches on the same day you flew to Brazil, we consider this a deliberate attempt to make us accept it as a 'fait accompli'," said a statement from the FECOFA, the controlling body.
However, Katumbi told Reuters the team had received permission to travel to Brazil and there were "no problems" with the Congolese football authorities.
