The Frenchman, who is attempting to win a sixth consecutive World Rally Championship title at this weekend's season finale in Wales, has not been granted the requisite super-licence by the FIA, world motor racing's governing body.
Loeb had remained hopeful of making a cameo appearance in Abu Dhabi after testing a GP2 car earlier this month and there were rumours in the paddock that Toro Rosso might be prepared to give the Citroen driver a run in place of Jaime Alguersuari.
Loeb, 35, impressed Red Bull in a one-off test last winter but finished last in the GP2 test in Jerez, more than two seconds off the fastest lap.
Alain Prost said that "common sense" had prevailed. "It would have been unique and incredible for all fans of motor sport," said the four-time Formula One world champion, "but such a shame to risk his reputation.
"It would have been absolutely impossible for him to be competitive on a circuit which he doesn't know, when all he has done is rallying throughout his career.
"That is not to put him down, on the contrary, but Formula One is not just any old thing. It is a completely different mountain to climb."
Loeb goes into the first day of Rally GB on Friday trailing Ford's Mikko Hirvonen by a single point in the standings.
Meanwhile, the FIA has confirmed that next year's Monaco Grand Prix has been moved forward by a week to May 16.
The change means that the famous street race takes place one week after the Spanish Grand Prix, and creates a two-week gap between Monaco and Istanbul.
F1 teams had been concerned that it would not be logistically possible to transport their equipment from Monte Carlo to Turkey in the one-week gap listed on the provisional calendar.
The Canadian and British GPs still have question marks over them, with Donington given until tomorrow to guarantee it has the finance for its revamp to go ahead.
The 2010 calendar will be ratified by the World Council in December.
By Tom Cary
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