FIFA president Sepp Blatter stated on Friday that the Gibraltar FA could not be accepted as a member because of the governing body's statutes regarding independent territories.
The British overseas territory became a member of UEFA last year after appealing to the Court of Arbitration for Sport, and will now look to take the same steps to challenge their latest setback.
"The Gibraltar FA is extremely disappointed the decision taken by football's world governing body, FIFA, at its Executive Committee meeting this week, to reject our membership application on the grounds that Gibraltar is not an independent country," read a statement released on Friday.
"The decision was announced, this afternoon, at a press conference, following a meeting of the FIFA Executive Committee, by FIFA President Sepp Blatter.
"The Gibraltar Football Association is extremely disappointed that once again political issues are being allowed to interfere with and take president [sic] over sporting considerations.
"Unfortunately this is a decision that, at this stage, the Gibraltar FA expected and as a result, the Gibraltar FA is already nonetheless engaged in preparing its case for admission to FIFA with the Court of Arbitration for Sport, in Lausanne Switzerland."
Gibraltar played their first European qualifying fixture earlier this month, losing 7-0 to Poland.
