The club had taken all legal measures to try to clear the player for the match at the Santiago Bernabeu Stadium, but ended up not including him in the squad because there had been no ruling on its latest appeal by today morning.
Barcelona's first appeal was rejected by the Spanish football federation last week, but the club was also trying to reverse the suspension through a local sports tribunal.
The club released a statement today criticising the tribunal for not making a decision on the case in time for the match.
Neymar was handed a two-game suspension for sarcastically applauding an assistant referee after being sent off in a 2-0 loss at Malaga on April 8.
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The two-match ban was in addition to the one-game suspension he was automatically required to serve for the red card. The Brazilian had already sat out one match.
Two-time champion Barcelona also won't have the injured Rafinha and Aleix Vidal, who have long-term injuries.
Madrid, seeking its first title since 2012, is expected to welcome the return of Gareth Bale, who had been sidelined because of a muscle injury.