Sion triumphed 3-1 in Switzerland after a goalless draw at Celtic Park
Celtic have been reinstated in the Europa League after Uefa expelled Sion from the competition.
Sion, who had been subject to a transfer embargo, fielded several new signings during their 3-1 aggregate win over Celtic in the play-off round.
A Celtic spokesman said: "We have been advised by Uefa that the two protests relating to the matches against FC Sion have been upheld."
"As a result of which each match has been forfeited in favour of Celtic."
Sion president Christian Constantin had been confident of winning the case
Celtic will therefore take Sion's place in Group I, which also features Atletico Madrid, Rennes and Udinese.
The spokesman added: "We are pleased by this decision, the approach which has been taken by Uefa and the fact that Uefa rules and regulations have been upheld. We are also grateful for the support of the SFA in this matter."
Sion have three days to appeal against the verdict.
Earlier in the week, the Swiss club's president Christian Constantin had been confident of preserving Sion's place in the competition.
He told BBC Scotland: "The bottom line is that we are in the right. There's no doubt.
"It's just that there are cases where Fifa want to take unilateral decisions by force rather than by just means.
"Uefa approved the list of players we submitted, but now, because of pressure from Fifa, they're trying to find justification for making us forfeit the tie.
"We will battle fiercely to avoid losing the case. Fifa may try to mask the facts, but that won't be easy."
Constantin added that Celtic were "within their rights" to lodge their protests.
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