Metalist have been drawn to play German side Schalke in the play-off round of the Champions League, with the first leg due to take place on 21 August but that game is now in doubt.
The club's lawyers attended a two-hour disciplinary hearing at UEFA headquarters in Switzerland on Tuesday to put forward their argument but have not yet confirmed whether they will appeal the decision.
A statement on the UEFA website read: "The UEFA Appeals Body carefully analysed the statements and documents submitted by the club, as well as the statements and documents submitted by the UEFA Disciplinary Inspector and reached the following decision:
"Metalist Kharkiv are disqualified from the 2013/14 UEFA competitions.
"The club has the opportunity to appeal the decision of the UEFA Appeals Body to the Court of Arbitration for Sport (CAS).
"In the meantime, the UEFA Emergency Panel - which is composed of five members of the UEFA Executive Committee - will hold a meeting to consider the consequences of the decision on the competition."
Metalist's place in the play-off stage against Schalke could go instead to Greek club PAOK Thessaloniki, who they beat in the third qualifying round.
But Metalist could be reinstated to the competition on a temporary basis if they appeal UEFA's decision to CAS which has the option of suspending sanctions.