Qatar failed to qualify for their first Olympics since 1992 after losing 2-1 to Iraq in Doha on Friday in a sudden death AFC Under-23 football match to decide which team would go to Rio.
Iraq won in extra time after only forcing the additional 30 minutes thanks to an 86th minute headed equaliser from Mohannad Abdulraheem.
Substitute Aymen Hussein secured the victory with another header in the 109th minute.
Hosts Qatar had taken the lead in the 27th minute through Ahmed Alaa.
The result will be a huge disappointment for Qatar, desperately looking to get a national team playing on the world stage before hosting the World Cup in 2022.
Iraq last played at the Olympics in 2004, where they finished fourth.
The teams were playing each other after losing their semi-finals earlier in the week.
Japan will meet South Korea in Saturday's final.
