The Super League side have not qualified for Europe but with UEFA still to announce their decision on PAS Giannina's application, the Greens were hoping that, should PAS not get the go-ahead to compete, they might sneak into the Europa League as the next best-placed team.
"Panathinaikos informs its fans that unfortunately it is not licensed to participate in European competitions next season as UEFA accepted the recommendations of the Hellenic Football Federation (EPO)," the club said in a statement.
"We still believe that our records and application was complete and sufficient and for this reason we will take our case directly to the Court of Arbitration for Sport (CAS)."
The decision does not affect the domestic licence Panathinaikos were granted to compete and make transfers in the Super League.
PAS earned Greece's final spot in the Europa League following their fourth-place finish in the top-flight playoffs, and the club remain among those included on UEFA's website for the second qualifying round.
UEFA said on Thursday it did not expect to make an announcement this week regarding PAS Giannina.
Should PAS fail to be given the green light by UEFA, the next best-placed club Skoda Xanthi will take their place.
- Sports & Recreation
- PAS Giannina