The Serbian side were thrown out of the competition last month after 36 people were injured during Partizan's first qualifying round first-leg match against Bosnian side Zrinjski Mostar.
Partizan were granted a temporary deferral of the punishment pending their appeal against the verdict and went on to win the tie 11-1 on aggregate.
Tuesday's decision means Zrinjski will now take Partizan's place in the second qualifying round against Macedonian side FK Rabotnicki.
Partizan allowed to play
The appeals body also upheld the original fine of 50,000 Swiss francs (£20,000) handed down by UEFA's disciplinary body.
Partizan will also have to compensate Zrinjski for the damage caused to their stadium.
"UEFA has shown there is no alternative to taking its rules very seriously and complying with them. We have to learn a lesson from this unfortunate course of action," Partizan coach Miroslav Djukic said.
"This is a severe blow to Partizan and to Serbian football," agreed team captain Antonio Rukavina. "It is a bitter pill to swallow but we have to pull our socks up and get on with it."
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