Their place in the final round playoffs will be taken by Tunisia, who the Cape Verdians had sensationally eliminated at the weekend to win their group with a shock 2-0 win in Tunis.
Tunisia coach Nabil Maaloul quit in the wake of the embarrassing setback.
FIFA said in a statement that Tunisia had been awarded a 3-0 victory because Cape Verde defender Fernando Varela should have sat out the match after being sent off in a qualifier in March.
It means Tunisia finish top of Group B and will play in the final round of the qualifiers next month and in November. The 10 group winners go into a draw on Monday to determine the pairings for the five playoff matches from which the winners will go to Brazil next year.
Cape Verde have also been fined 6,000 Swiss francs (£4,100) after a meeting of the FIFA disciplinary committee.
The latest administrative mix-up continues a bizarre sequence of similar failings that have already seen Burkina Faso, Equatorial Guinea, Ethiopia, Gabon, Sudan and Togo all sanctioned for using ineligible players during the 2014 qualifiers.
Cape Verde had themselves been awarded 3-0 wins from their two group matches against Equatorial Guinea following similar sanctions, which put them back in contention to win the group after Tunisia had in June seemingly sewn up top place.
Equatorial Guinea had won the first match 4-3 while Cape Verde won the return 2-1.
The Cape Verde Football Federation (FCF) was quoted by Portuguese media as saying that it considered Varela's suspension had been annulled along with the result of the match in Equatorial Guinea.
"The matches in which Cape Verde faced Equatorial Guinea were declared void, giving 3-0 wins to Cape Verde, and the effect of those (decisions) was that the disciplinary sanctions arising from the games were lifted," it said in a statement.
Cape Verde, who had already produced giantkilling results earlier this year in reaching the quarter-finals of the African Nations Cup, caused another big shock with a win on Saturday to usurp Tunisia in the standings.
- Sports & Recreation
- Cape Verde
- Equatorial Guinea