Wilshere was charged by the FA after television cameras showed the 21-year-old raise his middle finger in the direction of home supporters at the Etihad Stadium during Arsenal's 6-3 Barclays Premier League defeat against City on Saturday.
Referee Martin Atkinson missed the offensive gesture from Wilshere, but the FA were able to retrospectively initiate disciplinary proceedings against the player under a new pilot scheme for 'not seen' incidents in Premier League matches
A three-man independent panel unanimously agreed that the gesture would have merited a dismissal had it been seen by the match official at the time.
Wilshere admitted the charge but appealed the mandatory two-game ban on the grounds that the length of the punishment was excessive.
But the appeal was rejected by the FA so Wilshere will now miss Arsenal's live Sky clash with Chelsea on December 23 as well as the Boxing Day trip to West Ham.
A statement from the FA read: "Arsenal's Jack Wilshere has been suspended for two matches by an independent regulatory commission.
"Wilshere was charged by the FA with making an offensive and/or insulting and/or abusive gesture during the fixture between Manchester City and Arsenal at the Etihad Stadium on Saturday 14 December.
"The incident was not seen by match officials, but was caught on video.
"Whilst admitting the charge, Wilshere claimed the standard sanction for this offence was clearly excessive. The commission rejected this claim and the two match suspension will commence with immediate effect."
Liverpool's Luis Suarez received a fine and a one-match ban for a similar incident in December 2011 against Fulham. But a precedent had been set earlier this season after Blackpool winger Tom Ince was handed a two-match suspension after being retrospectively charged following his gesture towards a match official in a match against Preston.
FA chairman Greg Dyke admitted he sympathised with the England midfielder but insisted Wilshere must learn to cope with being a target for opposition supporters
"As a supporter I sympathise with the players because of the flak they get from the crowd," Dyke told talkSPORT.
"People can lose their cool very quickly, but he (Wilshere) has got to learn. He's very well paid to play the game and he's got to learn to cope with it.
"You think back over many years of players who were hot-headed when they were younger, but not when they get older. They just learn and mature. That is what happens. It is part of life."