Steven Shingler is tied to Wales and ineligible to play Test rugby for Scotland, the International Rugby Board's council ruled in a unanimous decision.
Shingler was judged by the IRB to have been "captured" by Wales after playing in an Under-20 international against France in 2011.
The eligibility row was sparked when 20-year-old Shingler, a fly-half or centre, was included in Scotland's RBS 6 Nations squad earlier this year.
The Scottish Rugby Union appealed against the original decision that Shingler was tied to Wales, made by the IRB's regulations committee.
But that appeal was thrown out at the IRB council meeting.
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