Inzamam, 36, was banned for four one-day internationals last month after being found guilty of bringing the game into disrepute following Pakistan's decision to forfeit the controversial Oval Test against England.
Inzamam would have been eligible to play if Pakistan qualified for the final by winning their three league matches and the semi-final in the ongoing tournament in India.
But Pakistan's decision to replace Inzamam with Faisal Iqbal for the early part of the tournament has dashed stand-in captain Younis Khan's wish to have his country's most prolific batsman for the final.
ICC spokesman Brian Murgatroyd told AFP that rules state that once a player is replaced he cannot be reinstated later in the tournament.
"Clause 6.9 of the participating agreement clearly states that," Murgatroyd said. "I am afraid Inzy will not be able to play in this Champions Trophy."
Younis, himself under the spotlight for initially refusing the captaincy for the tournament before finally accepting it the day Pakistan left for India, had hoped Inzamam would be able to play in the final.
"It will be really good if we win our first four games and then Inzy comes back," Younis had told reporters on arrival in India last week.
"I will be ready to stand down as captain. I will be really happy to see him lift the Trophy while I am standing behind him. He has been one of my heroes right from the 1992 World Cup."
Inzamam's 11,549 runs make him the second highest scorer in one-day cricket after India's Sachin Tendulkar and one of only four players to have crossed the 10,000-run mark.
Pakistan forfeited the Oval Test in August after umpire Darrell Hair docked them five runs for ball-tampering and replaced the existing ball.
Pakistan stayed off the field in protest after tea on the fourth day forcing Hair and his colleague Billy Doctrove to award the Test to England.
Inzamam was, however, cleared of the ball-tampering charge by the ICC's chief match referee Ranjan Madugalle at the hearing in the last week of September.
Younis, who was Inzamam's deputy on the England tour, dramatically rejected the captaincy two days before the team's departure for India, saying he did not want to be "a dummy captain".
Mohammad Yousuf was handed the captaincy, but Younis got the job back when Pakistan Cricket Board chairman Shaharyar Khan resigned and was replaced by Nasim Ashraf.
Pakistan have been drawn with South Africa, New Zealand and a qualifier (possibly Sri Lanka or the West Indies) in group B of the preliminary league.
Pakistan play the qualifier in their first match in Jaipur on Oct 17, then face New Zealand in Mohali on October 25 and South Africa two days later in Mohali.
Two teams from the group will advance to the semi-finals. The other group comprises world champions Australia, hosts India, England and a qualifier.