The Court of Arbitration for Sport(CAS) has backed world football governing body FIFA's decision to ban Vukovic from international fixtures until October 5th.
The ban, imposed on Vukovic for striking a referee, ends his hopes of competing with the Olyroos in Beijing.
Mariners boss Lyall Gorman said the club is disappointed with the CAS's finding.
"Our club ... has exhausted every possible avenue of appeal in order to give Danny the best possible chance of fulfilling his Olympic Games ambition and unfortunately this has not resulted in the desired outcome," he said.
"As we have maintained from day one, we do not condone in any fashion any player making contact with a match official and while we feel that the sanction for this unfortunate incident far exceeds the crime, it is now time to accept the umpire's decision and that of FIFA and the CAS and move on.
"Now, we as a club and Danny as an individual must move on as we look past the 2008 Olympic Games and to the A-League 2008/09 season and beyond."
Vukovic is eligible to play for the Mariners in domestic competition until August 29th, at which point he will commence a five-match A-League suspension until October 5th.