The Asian Football Confederation have announced they have reluctantly decided to disqualify Iraqi clubs from the 2010 AFC Cup.
FIFA handed the Iraq Football Association (IFA) a ban in November last year after the Iraq Olympic Committee had seized control of the organisation's headquarters.
The AFC had made two draws for the AFC Cup - one with Iraqi clubs and one without - and set a deadline of January 3 in the hope the issue would be resolved by that date.
However, the suspension remains in place giving the AFC no option but to disqualify Iraq sides Arbil and Al Najaf from the tournament.
"It is with deep regret that Iraqi clubs cannot participate in the AFC Cup 2010,'' said AFC President Mohamed Bin Hammam on the AFC's official website.
"We, however, gave our best efforts in supporting the Iraq FA in trying to ensure that their teams played in the competition.''
The absence of Arbil and Al Najaf means no play-off will take place between Al Rayyan of Qatar and Uzbekistan side Nasaf for a place at the AFC Cup.
Both teams will instead enter the group stages with Al Rayan playing in Group E while Nasaf are in Group C.