The 19-year-old attacking midfielder, who spent the past season on loan at Sporting Gijon, was named in the 27-man provisional squad by coach Ante Cacic.
Halilovic had previously said it would "not be a tragedy" if Cacic did not take him to the tournament.
And he will indeed not be making the journey to the finals in France - Halilovic is one of four players failing to make the cut.
Also omitted are goalkeeper Dominik Livakovic, defender Duje Caleta-Car and midfielder Domagoj Antolic.
Liverpool's Dejan Lovren was not considered for selection by Cacic for disciplinary reasons.
The defender was accused of refusing to warm up after being named among the substitutes for a friendly against Hungary in March and latter delivered an ultimatum to the coach, demanding he be picked in the first XI and threatening to make himself unavailable for the tournament, prompting Cacic to axe the 26-year-old indefinitely from the national team set-up.
Darijo Srna will captain the side, with the likes of Luka Modric, Ivan Rakitic and Mario Mandzukic all likely to be key to Croatia's hopes of success.
Croatia have twice reached the quarter-finals of the Euros, but were knocked out in the group stage four years ago.
Croatia squad in full:
Goalkeepers: Danijel Subasic (Monaco), Lovre Kalinic (Hajduk Split), Ivan Vargic (Rijeka)
Defenders: Tin Jedvaj (Bayer Leverkusen), Darijo Srna (Shakhtar Donetsk), Sime Vrsaljko (Sassuolo), Gordon Schildenfeld (Dinamo Zagreb), Vedran Corluka (Lokomotiv Moscow), Domagoj Vida (Dynamo Kiev), Ivan Strinic (Napoli)
Midfielders: Marko Rog (Dinamo Zagreb), Mateo Kovacic (Real Madrid), Luka Modric (Real Madrid), Marcelo Brozovic (Inter), Ivan Rakitic (Barcelona), Milan Badelj (Fiorentina), Ante Coric (Dinamo Zagreb), Ivan Perisic (Inter)