The club was found guilty of illegitimately fielding Amir al Shatri, a national team player, during the match at the Seeb Sports Stadium on November 17, which Nahda won 2-1.
The Oman Football Association's (OFA) appeals’ committee, hearing a protest from Rustaq on Sunday, upheld the disciplinary panel ruling and announced the verdict.
The panel, headed by Talal al Saadi, adjudged Rustaq as the winner of the match with a 3-0 margin, which put the unfancied OPL debutant in the round of 16 of the HM's Cup. Rustaq's opponent in the pre-quarterfinals will be former winner Oman Club, which had been initially drawn against Nahda.
The Rustaq-Oman match will be played at the Buraimi Sports Complex on December 9. Nahda's ouster marks the first such instance in the history of the tournament.
Shatri, a defender, had been red-carded during last season's HM's Cup match between Al Nahda and Dhofar. He was to serve a two-match ban in the tournament's next edition - the ongoing one. However, he had been allowed to play in the OPL.
When Rustaq found out that Nahda illegitimately fielded Shatri in the November 17 match, it appealed to the OFA, citing a violation of the tournament rules.