The Brazilian is currently serving a three-match suspension but the club had appealed the ban and were hopeful of overturning the decision.
Indeed reports on Saturday had claimed Neymar could travel to Madrid while Luis Enrique had admitted he had plans for the game with and without the Brazilian.
Barca had claimed to be waiting for a definite ruling from TAD but have now confirmed Neymar will not be in the squad for tonight’s game.
"Against the uncertainty due to the lack of reply from TAD with 12 hours to go until the game, and to focus all attention on sporting matters, the club have opted not to call up Neymar," the club said in a statement.
"However, Barcelona expresses its amazement at TAD's refusal to exercise its jurisdictional functions, something which directly damages both the clubs and the competition itself."
Despite Barca’s appeals, the news does not come as a huge surprise, and is likely to disrupt the team’s plans with Luis Enrique already well aware his team simply have to win on Sunday.