The left-back was booked in his side's 2-1 win over Sevilla on Wednesday for a tackle on Vitolo, which saw him earn a suspension as it was his fifth yellow card of the season.
The Brazilian protested his innocence after the game, insisting he did not touch the Sevilla winger and the club appealed the decision in the hope he would be allowed to play against their city rivals.
However, the Royal Spanish Football Federation (RFEF) have upheld the card, meaning the defender will be absent for the vital clash at the Vicente Calderon.
The suspension is an additional blow to Carlo Ancelotti's side. James Rodriguez, who has a broken metatarsal, is definitely ruled out, while Sergio Ramos remains a doubt having picked up a hamstring injury during Wednesday's win.
Real Madrid are seven points ahead of third-place Atletico going into the match.
