City had asked the Court of Arbitration for Sport [CAS] to throw out the financial fair play case that had been brought against the club by UEFA.
CAS general secretary Matthieu Reeb told reporters that the Premier League champions’ appeal had been judged inadmissible.
UEFA had opened an investigation into City over potential breaches of its break-even rule in March after German publication Der Spiegel reported the club’s Abu Dhabi owners inflated sponsorship agreements to comply with requirements.
In May, UEFA investigators referred the case to the Club Financial Control board’s judicial body.
City appealed in June against that decision, saying at the time that UEFA investigators had ignored “a comprehensive body of irrefutable evidence provided by Manchester City”.
FFP rules are intended to prevent clubs receiving unlimited amounts of money through rich owners and inflated sponsorship deals. Clubs who have breached the rules can ultimately be barred from European competition but negotiated settlements are more common.